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'Rogue trader' trial opens in Paris
Jerome Kerviel appears in court accused of unauthorised deals that cost bank $5.85bn.
Last Modified: 08 Jun 2010 17:42 GMT

The trial of Jerome Kerviel, the alleged "rogue trader" who is accused of unauthorised deals that cost Societe Generale, the French bank, $5.85bn has started in Paris.

The Frenchman, 33, is accused of losing the money in risky stock market trades and of hiding his actions from his former employers.

Kerviel plans to argue that he was a scapegoat for the bank, that risky betting practices were commonplace among traders, and that people higher up knew what he was doing and said nothing as long as he was making money for the bank.

One highlight of the trial is expected to be how Kerviel's legal team will try to demonstrate that claim, which is strongly denied by Societe Generale.

The court must decide whether Kerviel is solely responsible for the losses in a case seen by many as a symbol of the banking excesses blamed for the financial crisis.

He risks a maximum sentence of five years in prison and a fine of $450,000 if convicted on charges of breach of trust, falsifying and using fake documents and entering false data into company computers.

'Banking orgy'

Dressed in a dark suit and purple tie, Kerviel replied  "single, computer consultant" and declared a monthly salary of $2,750 when asked about his marital status and current occupation as the three-week trial opened on Tuesday.

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Societe Generale revealed in January 2008 that it had been forced to unwind $60bn of unauthorised deals it says Kerviel made.

He denies being solely responsible and has said he will call on the judge to acquit him when he takes to the dock at the Palais de Justice criminal courts in central Paris after a two-year inquiry.

Kerviel has said he made mistakes but maintains his bosses knew what he was doing and that he was part of a "big banking orgy," as he described it in a memoir published last month.

He wrote that traders habitually hid the size of their bets and bosses turned a blind eye to possible breaches of trading limits as long as earnings were high.

Top earners received congratulations as "good hookers," Kerviel wrote.

He told the AFP news agency last month that the trial was a chance "to show the public that I was not an isolated case and there were abuses throughout the banking and trading world".

Computer evidence

Kerviel said that among the 33 defence witnesses at his trial, some would shed light on the workings of the trading floor to prove that he had not acted without his bosses' knowledge.

"My aim is to show that at no point did Jerome Kerviel abuse the confidence of the bank," said Olivier Metzner, Kerviel's lawyer, ahead of the trial.

Metzner said he would present evidence recovered from trading computers to prove that Societe Generale was aware of Kerviel's actions.

Jean Veil, the bank's lawyer, has accused  Kerviel of "duplicity" for reassuring his employers that all was well.

"These hearings are going to open in a particularly tense atmosphere," Metzner said.

Kerviel spent 38 days in custody after his arrest in 2008 and has since started a job at a small IT company in a suburb of Paris.

Source:
Agencies
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