French 'Rogue Trader' Convicted, Must Repay Billions
MARY LOUISE KELLY, host:
In France, a judge has found the former futures trader Jerome Kerviel guilty of, among other things, forgery and breach of trust. Kerviel was sentenced to three years in prison without parole for losing nearly $7 billion while working for one of the largest banks in France. He was also ordered to repay the bank for its losses.
Eleanor Beardsley reports from Paris.
ELEANOR BEARDSLEY: Before the collapse of Lehman Brothers, there was l'affaire Jerome Kerviel. He was a midlevel trader with French bank Societe Generale. In 2007, Kerviel made some very risky bets and some equally risky transactions to cover them up. When his positions were discovered and sold off at a loss in January 2008, Societe Generale was out nearly $7 billion - a staggering sum at the time and the largest single bank fraud loss ever.
Today, Kerviel was found guilty of forgery, breach of trust and unauthorized computer use. The judge said by his deliberate actions, Kerviel had put in peril Societe Generale's very existence. Looking tense and angry after the verdict, Kerviel quickly left the courtroom. His lawyer, Olivier Metzner spoke to reporters.
Mr. OLIVIER METZNER (Lawyer): (Through Translator) He is revolted that those who made him have been exonerated of all responsibility. Jerome Kerviel would not have existed without Societe Generale, and this punishment is unbelievable for someone who never touched one cent.
BEARDSLEY: Kerviel never claimed to be innocent. He admitted lying to colleagues and exceeding trading limits, but argued that his superiors knew of his actions and that Societe Generale permitted it as long as he made money for the bank.
Unidentified Woman: (Foreign language spoken)
BEARDSLEY: News of the verdict spread quickly. It was soon the topic of the daily talk shows. Goliath slays David flashed one news title. Observers seemed stunned and almost amused that the court had ordered Kerviel to reimburse Societe Generale the $6.7 billion. Kerviel currently earns about $40,000 a year as a computer consultant. Observers calculated that at that rate it would take him 177,000 years to pay off the debt.
Out on the street, people were outraged. Fifty-year-old Gilles Rivet was withdrawing money at a cash machine, ironically at a branch of Societe Generale.
Mr. GILLES RIVET: (Through translator) If he earned money, we heard nothing about it. This group of bandits at Societe Generale was in complete cahoots with this poor guy and made him take the fall. French banks are disgusting. They play with billions, but if you're overdrawn three euros in your account, you'll surely hear from them.
English teacher Christine Zegzouti said she talked about the verdict with her class.
Ms. CHRISTINE ZEGZOUTI (English Teacher): And we are all aghast with this. We think it's terrible. But there's nothing we can do. What can we do? If you don't have people who know you, and if you are little, you will never win against big, big bodies such as banks.
BEARDSLEY: Kerviel has filed an appeal. But hes already won in the court of public opinion.
Eleanor Beardsley, NPR news, Paris.