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France court begins trial of 'rogue trader'

By Hillary Stemple

[JURIST] The trial of accused "rogue trader" Jerome Kerviel [BBC backgrounder; JURIST news archive] began Tuesday in a French court. Kerviel has been charged [JURIST report] with breach of trust, forgery, and breaching IT access codes relating to $73 billion worth of unauthorized trades he made while working for French bank Societe Generale [bank website]. Societe Generale lost nearly USD $7 billion when it was forced to unload the fraudulent trades. Kerviel has admitted to performing the trades [WSJ report], but contends the bank knew about the fraudulent practices and chose to ignore them as long as they were profitable. Authorities and bank officials agree that Kerviel did not personally profit from the trades he was making. Kerviel faces five years in prison and a fine of close to USD $450,000 if convicted. His trial is expected to last for three weeks.

Kerviel was originally detained [JURIST report] in February 2008 as the investigation into the fraudulent trades was conducted. He was released in March 2008 [JURIST report] but instructed not not to leave the country or communicate with a number of former colleagues. Police also questioned a second trader in connection with the fraudulent trades, but the man has since been named an assisted witness [JURIST reports] in the case against Kerviel, a designation that allows him to testify in the presence of a lawyer.

Full post as published by JURIST - The Paper Chase on June 09, 2010 (boomark / email).