Business, Economics and Jobs

French rogue trader Jerome Kerviel ordered to pay bank 4.9 billion euros


French rogue trader Jerome Kerviel (R) leaves the cabinet of his lawyer David Koubbi (L) on October 24, 2012 in Paris, after losing his appeal against a three-year jail term and a 4.9-billion-euro fine for his part in France's biggest rogue-trading scandal.



French rogue trader Jerome Kerviel has lost his appeal in Paris against a three-year prison sentence and been ordered to pay back a staggering 4.9 billion euros (about $7 billion) in damages to his ex-employer, Societe Generale.

The Wall Street Journal reported that a French appeals court upheld a 2010 decision that Kerviel, now 35, pay back the sum he lost in unauthorized trades for the bank in January 2008.

Kerviel's fraud — one of the biggest of its kind — involved forgery and unauthorized computer to cover up bets worth nearly 50 billion euros.

However, Kerviel — who the Associated Press points out never profited personally from his unauthorized trades — said his bosses knew what he was doing, and that he was a scapegoat for corporate greed.

However, the court's written ruling said:

"Jerome Kerviel was the sole creator, inventor and user of a fraudulent system that caused these damages to Societe Generale."

The five-year prison — plus the order that Kerviel pay back the losses incurred — shocked the French public, many of whom blame the global financial crisis on big banks, the AP wrote.

Meanwhile, Societe Generale has said it will not demand full repayment, as Kerviel would be unable to do so in his lifetime, BBC wrote.

It said it would take into account Kerviel's income and assets when deciding how much it wanted paid back.

Attorneys for Kerviel said they might consider a second appeal against the original sentence.