French Court Places Trader in Detention

PARIS — A Paris court sent French trader Jerome Kerviel behind bars Friday, while the investigation into billions of euros (dollars) of losses he allegedly caused for bank Societe Generale took a new twist with a second employee taken into custody.

Investigators want to know whether Kerviel acted alone, and if so, how it was that a brokerage employee sent him a message before the scandal broke, saying: "You have done nothing illegal in terms of the law."

The bank, prosecutors and France's finance minister have said that Kerviel appeared to have acted without help when he made massive unauthorized bets on European futures markets that the bank said cost it nearly 5 billion euros (more than $7 billion) to unwind.

The 31-year-old futures trader was sent to La Sante jail outside Paris, said a judicial official who declined to be named because of the sensitivity of the case. Famous La Sante inmates of the past include Venezuelan terrorist Carlos the Jackal and Nazi collaborator Maurice Papon.

The court was concerned that, if left free, Kerviel could have jeopardized what promises to be a long and complex investigation _ by contacting possible accomplices or exerting pressure on witnesses, the official said. The prosecutor's office had urged the court to jail him.

Societe Generale, one of France's biggest banks, has faced uncertainty over its future since the scandal broke Jan. 24, as well as questions about how Kerviel's massive trades could have gone unnoticed. The bank has said repeatedly he did not appear to have had accomplices.

But the bank's lawyer, Jean Veil, raised the possibility Friday that Kerviel only claimed to have acted alone to avoid being jailed.

Christophe Reille, a spokesman for Kerviel, described the trader as "serene" after the judges sent him to jail.

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"He faced up to it," Reille said. "I saw him walk past me, with the gendarmes. He was very natural."

Kerviel's lawyer, Elisabeth Meyer, said she planned to appeal, and compared her client's defense against the powerful bank to "David fighting Goliath." Judges had allowed Kerviel to go free last month, after Meyer argued he did not pose a flight risk.

The revelation that a second employee was taken into custody on Thursday was a potentially big twist, and could add a whole new layer of complexity to the case if it turns out that he was an accomplice. The brokerage employee was still being held Friday evening.

The employee worked at Newedge, a 50-50 joint venture between Societe Generale and Calyon bank, according to another judicial official who spoke on condition that her name not be used. Police investigators also searched the Newedge office on Paris' Champs-Elysees in the case, the official said. Kerviel passed some of his trades through the brokerage, the official said.

Among new evidence in the case is a message sent to Kerviel through the bank's computer system by the broker now in custody. The message, sent Nov. 30, read, "You have done nothing illegal in terms of the law," the official said, confirming a report that first appeared in Le Monde newspaper.

Joelle Rosello, a Societe Generale spokeswoman, confirmed the employee was in custody. "We are cooperating closely with police," she said.

Societe Generale announced Jan. 24 that it lost 4.82 billion euros ($7.09 billion) in cleaning up Kerviel's unauthorized transactions. It said Kerviel overstepped his authority and bet 50 billion euros ($73 billion) _ more than the market value of the entire bank _ on futures in European equity markets. It also said he did not appear to have profited personally from the trades.

Since new of the case broke, there has been speculation that Societe Generale could be bought out or broken up.

Investigating judges have filed preliminary charges against Kerviel for forgery, breach of trust and unauthorized computer activity. Such preliminary charges allow judges time to further investigate and decide whether to send the case to trial.

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Associated Press writers John Leicester and Angela Doland contributed to this report.