SocGen trader denied bail

Probe into $7.09bn losses at French bank intensify as a second suspect is detained.

Societe Generale scandal
Elisabeth Meyer, one of Kerviel's  lawyers, says she will appeal against the court's decision [AFP]

Police separately held for questioning a broker at Fimat, a Societe Generale subsidiary. Police believe the broker may have been aware of deals by Kerviel which led to the losses, legal sources said.


It is the first indication since the $7.09bn in losses were revealed on January 24 that another person may have been involved.


The court ordered the 31-year-old trader detained “to prevent any communication with possible accomplices or co-offenders” or “pressure on possible witnesses,” a judicial source said.


A lawyer for Societe Generale said the junior trader was detained because of discrepancies in his testimony.


David against Goliath


Kerviel’s lawyer said he was fighting an uneven battle against the bank: “From now on, it’s David against Goliath,” she told reporters.


The trader has insisted he acted alone in unauthorised trades totalling $73bn.


Kerviel was detained on January 26 after and two days later charged with breach of trust, fabricating documents and illegally accessing computers. He was released on bail.


Kerviel insists he acted alone in the unauthorised trading last month [AFP]

He had been living in the Paris region after handing in his passport and promising not to contact former colleagues.


The trader admitted that he had exceeded his authority to make the huge wagers on the European derivatives market, falsifying emails and faxes in order to fool the bank’s internal controls.


The trades were unwound by the bank during the major falls in world stocks of January 21 and 22, leading to massive losses and leaving Societe Generale dangerously exposed to a take-over bid.


The second broker, who has not been named, was held for questioning on Thursday.


According to Le Monde newspaper, the broker was taken into custody after Societe Generale passed new evidence to police, including transcripts of “chats” on the bank’s internal messaging system.


Earlier in November the European derivatives exchange Eurex had alerted Societe Generale to Kerviel’s suspect trades.


Societe Generale has also handed over Kerviel’s mobile phone bills.


Kerviel is believed to have carried out some of his unauthorised trades via Fimat.




According to Le Monde, the management of Societe Generale has launched an internal inquiry to work out why no one at Fimat spotted the anomalies.


The French government has blamed Societe Generale’s risk control mechanisms for failing to detect Kerviel’s activities.


Prosecutors have said Kerviel sought huge profits to claim a higher bonus and to improve his reputation.


Societe Generale insists that the trader acted alone, though this has been questioned by some experts.


Kerviel told police he could not believe senior managers were unaware of his trades, given the profits he was generating before his downfall.


In an interview earlier this week, he said he accepted his share of responsibility but would not be “made a scapegoat by Societe Generale”.

Source: News Agencies


More from News
Most Read