PARIS — A former junior trader for France's second-largest bank who was ordered Wednesday to pay back a staggering (EURO)4.9 billion (about $7 billion) in damages to his ex-employer is painting himself as the victim of a financial system that runs on greed.
Only the Bill Gates or the Warren Buffetts of the world could come up with the breathtaking sum an appeals court demanded Jerome Kerviel reimburse to Societe Generale as punishment for committing one of the biggest trade frauds in history. Kerviel says he will fight back with a new appeal to France's highest court.
The court upheld in full the initial 2010 guilty verdict and sentence, which includes a three-year prison term, against the 35-year-old rogue trader.
He sees himself not as a fraudster but as a victim of a system that turned a blind eye to his colossal positions in late 2007 and early 2008 as long as they made money for the bank.
Hours after the verdict, Kerviel announced his plan to appeal, which he has until Monday to file.
"I will continue to fight," he told RTL radio. "I think the judgment is protecting Societe Generale."
Kerviel called on people in banking, notably Societe Generale employees, who have information to come forward and serve as witnesses. "I'm looking for the truth to be told."
Kerviel, who never profited personally from his unauthorized trades, said he had thought the court might acquit him.
"I absolutely didn't expect this ruling," he said in his first comments after slipping out the side door of the courtroom. "What happened today is a call for me to put a bullet in my head," he said. He added, when asked, that he does "absolutely not" envision suicide.
The lawyer for Societe Generale, Jean Veil, called the verdict "a great satisfaction," particularly the court's demand the former trader reimburse the (EURO)4.9 billion ($7 billion at the time) that it cost the bank to unwind his astronomical positions.
Still, Veil acknowledged that full repayment would, in all likelihood, be out of the question.
Banned for life from working in the financial industry, Kerviel was making (EURO)2,300 ($3,150 at the time) as a computer consultant after leaving the bank. Societe Generale had paid him less than (EURO)100,000 ($155,700) with bonuses, a modest sum for what he earned for the bank in 2007 when he amassed (EURO)1.4 billion in profits for the bank.
"Societe Generale will look at it realistically," Veil told reporters. However, he indicated the bank could take over royalty earnings from a book Kerviel published this year about the scandal as well as any income he might earn from movie deals.
"It would have been indecent for Mr. Kerviel to be able to preserve revenues coming from the exploitation of his fraud," Veil said.
The appeals court upheld the October 2010 conviction of Kerviel for forgery, breach of trust and unauthorized computer use for covering up bets worth nearly (EURO)50 billion – more than the market value of the entire bank. It sentenced him to a five-year prison term – with two years suspended – ordered he pay (EURO)4.9 billion in damages.
A new appeal to the Court of Cassation would suspend carrying out the sentence.
Kerviel's lawyer, David Koubbi, called the verdict "absolutely lamentable."
The argument turns broadly on who is the victim in the case.
The Societe Generale lawyer pointedly referred to the bank as "the victim." But for many others, the real victim was the trader, who maintains he was a cog in a financial system that runs on greed and profits.
A colleague from Societe Generale who testified on Kerviel's behalf said the court didn't take into account others at the bank who surely knew about Kerviel's risky bets.
A junior futures trader such as Kerviel "could in no case do what he did without being seen" by his superiors, Philippe Hoube said after the verdict. "If justice had played its role, they wouldn't have sentenced him so heavily," he said.
An internal report by the bank has said managers failed to follow up on 74 different alarms about Kerviel's activities.
By the time his trades were discovered in early 2008, when banks were sliding into a global crisis, had amassed losses of almost (EURO)5 billion on those bets in one of the biggest trade frauds in history.
The sentence – a five-year prison term, with two years suspended, plus the payback of all the losses he incurred – shocked many in the French public. After a global financial crisis that many blamed on big banks, many still believe Kerviel's claim that he was a victim of an unjust system.
"I'm someone who believed in French justice. But one day I understood that there is justice for the powerful and another for ordinary citizens," said Jean Debrex, a retiree who attended Wednesday's audience.
A few of the bank's executives resigned in the scandal's aftermath, including longtime Chairman Daniel Bouton. Kerviel's superiors were questioned in the probe, but none of them faced charges.
The bank says Kerviel made bets on futures contracts on three European equity indices. It said at the time that his net position appeared unremarkable because he balanced his real trades with fictitious transactions.
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