Court Frees Jailed SocGen Trader

03/28/2008 05:12 am ET | Updated May 25, 2011

PARIS — A French court Tuesday ordered the release of a Societe Generale trader accused of causing billions in losses through rogue trades.

Jerome Kerviel was expected to leave Paris' La Sante prison later in the day. He has been held there since Feb. 8 pending an investigation into massive and allegedly unauthorized trades.

Prosecutors tried to keep Kerviel, 31, in custody to prevent him from speaking with accomplices _ if he had any. Kerviel maintains that he acted alone. His lawyers argued that Kerviel has cooperated with investigators, has shown no signs of wanting to flee France and could in no way hinder the investigation.

"We were expecting this decision, we were hoping for it," said Kerviel's lawyer Elisabeth Meyer. "The court listened to us."

Once out, "He is going to rest, and we are all going to let him rest," Meyer said. She did not say where he would go.

The bank did not protest the ruling. Societe Generale lawyer Jean Veil noted the decision came with strict judicial surveillance. Kerviel must report to police once a week.

Spokesman Christophe Reille did not elaborate on the order to free Kerviel.

Kerviel must surrender his identity card and passport and is prohibited from leaving the Paris region and entering trading floors or stock exchanges, according to a judicial official. The official spoke on condition of anonymity because the investigation is ongoing.

He is barred from meeting certain people, judicial officials said, without giving names. Two people who worked with Kerviel were questioned and released.

Societe Generale says it discovered the unauthorized trades in late January and spent three days unwinding them on shaky world markets at a cost of nearly 5 billion euros (more than $7 billion).

Shares in Societe Generale have dipped, but the bank restored some investor confidence with a 5.5 billion euros capital hike that wrapped up earlier this month. Shares were up 2.6 percent Tuesday morning to 64.62 euros ($101.90) in Paris.

Kerviel faces preliminary charges of forgery, breach of trust and unauthorized computer activity.

Although Kerviel has said he acted alone, he also said his bosses at Societe Generale must have been aware of his massive risk-taking, and turned a blind eye as long as he was making money for the bank.

A preliminary internal probe by Societe Generale found no evidence that anyone helped Kerviel hide his positions, or that the trader profited from personal monetary gains. The report said bank officials failed to follow up on 74 warnings about questionable trades.

Frederik Canoy, a lawyer for small shareholders of Societe Generale, a third party in the case, said it is easier for Kerviel to defend himself now that he is being released.

"It was much more difficult when he was locked up to speak with his lawyer. Now that he is out of prison it will accelerate the process," he said.


AP Business Writer Emma Vandore contributed to this report.