Jerome Kerviel, a former Societe Generale employee, has lost his appeal against a three-year prison sentence for his role in France’s biggest rogue-trading scandal.
A Paris appeals court on Wednesday upheld a 2010 conviction against the 35-year-old former trader for taking huge, risky bets that cost the French bank $6.4bn.
“Jerome Kerviel was the sole creator, inventor and user of a fraudulent system that caused these damages to Societe
Generale,” the court said in its ruling.
It also said he must also repay the bank the billions of dollars lost, potentially a life-time claim on part of his earnings.
However, Societe Generale has said it will not demand full repayment.
In all, Kerviel’s sentence is for five years in jail, two of which are suspended, but he will not be forced to go to jail immediately.
A separate judge will decide the precise terms of his sentence and how many hours he spends behind bars every day – a process that lawyers say could take weeks.
Clem Chambers, chief executive of ADVFN, Europe’s largest financial information website, told Al Jazeera from London that it is likely that Kerviel will spend only a year in prison.
“He’s lucky he’s not in America or he’d be going to jail for like a 100 years,” he said, adding that there is “zero hope” that Kerviel will pay back the billions owed.
“Billions being lost by rogue traders is going to be part of the story of our financial futures,” said Chambers.
The ruling is a victory for Societe Generale, which has spent years trying to shake off the scandal after it hit headlines around the world at the dawn of the 2008 financial crisis.
It also comes as the financial industry battles lawsuits over crisis-era behaviour and a public perception it is too risky.
David Koubbi, Kerviel’s lawyer, said he was examining the possibility of calling on France’s highest court of appeal, the Cour de Cassation, to rule on the legality of the rulings.
“We had given ourselves the goal of defending Mr. Kerviel against an absolutely appalling injustice. I can tell you that we’ve failed,” Koubbi told journalists outside the court.
Kerviel has never denied masking the $65bn positions that made headlines around the world as the financial
crisis unfolded in early 2008, he has always said his managers knew what he was doing, an accusation SocGen denies.
Daniel Bouton, Societe Generale’s former chief executive, testified both this year and in 2010, calling Kerviel a “great deceiver” and saying that the bank’s risk managers and back-office staff never stood a chance against the trader’s manipulations.
The lack of a new “smoking gun” during this year’s appeal that might have radically shaken up the case meant that outside observers saw Kerviel’s chances of walking free as slim.
But if the judge had put any responsibility onto Societe Generale for the losses, the bank might have had to repay $2.2bn in tax write-offs on the losses.