2002-04-05
Major French bank confirms investigation into alleged money
(APW_ENG_20020405.0255)
1) Societe Generale SA confirmed Friday that one of its local managers in Paris has been placed under formal investigation in connection with an alleged money laundering scheme between France and China.
2) French judicial authorities placed the manager, the commercial director for eastern Paris, under investigation at the end of last January, the bank said.
3) Societe Generale, one of France's largest banks, is already facing an inquiry into alleged involvement in a separate money laundering ring between France and Israel.
4) According to a report in French newspaper Le Monde, judicial authorities suspect Societe Generale of taking part in recycling some 200 million euros (dlrs 175 million) in suspect funds.
5) A spokesman for Societe Generale said the probe involves three accounts opened by the French bank.
6) He said suspicions harbored by the bank about the accounts had been communicated to the authorities, but the accounts were kept open to allow further investigation.
7) ``We retain complete confidence in our colleague and will guarantee the costs of his defense,'' said the spokesman, who asked not to be named.
Major French bank confirms investigation into alleged money
(APW_ENG_20020405.0265)
1) Societe Generale SA confirmed Friday that one of its local managers in Paris has been placed under formal investigation in connection with an alleged money laundering scheme between France and China.
2) French judicial authorities placed the manager, the commercial director for eastern Paris, under investigation at the end of last January, the bank said.
3) Societe Generale, one of France's largest banks, is already facing an inquiry into alleged involvement in a separate money laundering ring between France and Israel.
4) According to a report in French newspaper Le Monde, judicial authorities suspect Societe Generale of taking part in recycling some 200 million euros (dlrs 175 million) in suspect funds.
5) A spokesman for Societe Generale said the probe involves three accounts opened by the French bank.
6) He said suspicions harbored by the bank about the accounts had been communicated to the authorities, but the accounts were kept open to allow further investigation.
7) ``We retain complete confidence in our colleague and will guarantee the costs of his defense,'' said the spokesman, who asked not to be named.
2008-01-24
Societe Generale uncovers massive fraud by futures trader
(APW_ENG_20080124.0526)
1) French bank Societe Generale said Thursday it has uncovered a euro4.9 billion (US$7.14 billion) fraud -- one of history's biggest -- by a single futures trader who fooled investors and overstepped his authority.
2) The fraud destabilized a major bank already exposed to the subprime crisis. France's second largest bank by market value said it would be forced to seek euro5.5 billion (US$8.02 billion) in new capital.
3) Trading in Societe Generale's shares, which have lost nearly half their value over the past six months, was suspended on the Paris bourse. It was unclear when trading would resume.
4) The bank said it detected the fraud at its French markets division the weekend of Jan. 19-20. In a statement announcing the discovery, it called the fraud "exceptional in its size and nature."
5) It said a trader at the futures desk had misled investors in 2007 and 2008 through a "scheme of elaborate fictitious transactions."
6) The trader, who was not named, used his knowledge of the group's security systems to conceal his fraudulent positions, a SocGen statement said.
7) The individual confessed to the fraud, the bank said, and was being dismissed. His supervisors were to leave the group. Chief Executive Daniel Bouton offered his resignation but it was rejected by the board.
8) An analysis confirmed the "isolated and exceptional nature" of the fraud, the bank said.
9) The fraud appeared to be the largest ever by a single trader. If confirmed, it would far outstrip the Nick Leeson trading scandal in 1995 that bankrupted British bank Barings. Barings collapsed after Leeson, the bank's Singapore general manager of futures trading, lost 860 million pounds -- then worth US$1.38 billion -- on Asian futures markets, wiping out the bank's cash reserves. The company had been in business for more than 230 years.
10) The fraud was not as big as the 1991 scandal that led to the demise of the Bank of Credit and Commerce International. Claims by depositors and creditors there exceeded US$10 billion at the time.
11) International bank regulators seized BCCI, which had headquarters in Luxembourg, London and the Cayman Islands, on July 5, 1991. They acted on auditors' reports that described huge losses from illegal loans to corporate insiders and from trading transactions.
12) At Societe Generale, the fraud announcement came on the back of subprime-related difficulties. Subprime writedowns linked to the crisis in financial markets amounted to euro2.05 billion (US$2.99 billion), Societe Generale said.
13) As a result, the bank is planning a capital hike in the "following weeks."
14) The write-down and losses will lead the company to post a net profit of euro600 million to euro800 million (US$874 million to US$1.16 billion) for all of 2007, the Paris-based bank said.
15) The Bank of France said it was immediately informed of the fraud and was investigating. The French market regulator said it had no comment. France's Banking Federation also declined to comment.
16) Shares of SocGen closed down 4.1 percent at euro79.08 (US$115.25) on Wednesday. Full-year results will be announced Feb. 21.
Trader named in Societe Generale banking fraud case
(APW_ENG_20080124.1007)
1) The trader in the euro4.9 billion (US$7.14 billion) fraud at French banking giant Societe Generale was Jerome Kerviel, a person with knowledge of the case said Thursday.
2) Kerviel is at the center of the fraud case the bank uncovered last weekend, the person said, speaking on condition of anonymity because of the sensitivity of the still-developing case. Earlier, bank officials had said the trader was a Frenchman in his 30s.
Societe Generale uncovers massive fraud by futures trader
(APW_ENG_20080124.1045)
1) French bank Societe Generale said Thursday it has uncovered a euro4.9 billion (US$7.14 billion) fraud -- one of history's biggest -- by a single futures trader whose scheme of fictitious transactions was discovered as stock markets began to stumble in recent days.
2) CEO Daniel Bouton said the trader's motivations were "irrational," netting the trader no personal financial gains.
3) A person familiar with the case named the trader as Jerome Kerviel. Bank officials said the trader was a Frenchman in his 30s who probably acted alone. The person spoke on condition of anonymity because of the sensitivity of the case.
4) The bombshell announcement destabilized a major bank already exposed to the subprime crisis. France's second largest bank by market value said it would be forced to seek euro5.5 billion (US$8.02 billion) in new capital.
5) The Paris prosecutor opened a preliminary investigation into the case Thursday based on a complaint filed by a small shareholder concerned about losses incurred because of the fraud, a judicial official said.
6) The bank did not immediately say whether it was seeking criminal charges against the trader.
7) Trading in Societe Generale's shares, which have lost nearly half their value over the past six months, was suspended on the Paris bourse Thursday morning. Trading resumed midday, with shares dropping 5.5 percent to euro74.77 ($108.97)
8) Societe Generale said it detected the fraud -- comparable to a full year of the bank's profits in stable times -- at its French markets division the weekend of Jan. 19-20.
9) Once uncovered, Bouton said the bank alerted market regualors and moved immediately to close the trader's positions, incurring heavy losses amid sharp declines on world markets.
10) "This is a bad time for banks and the industry in general. But detecting the fraud over the weekend was problematic because world stock markets on Monday and Tuesday fell hugely around the world. When the positions had to be unwound, the bank did that in a terrible market of falling equities," said Janine Dow, senior director at Fitch Ratings financial institution group in Paris
11) "In hindsight, it was this guy's superior knowledge of the control system of every aspect of trading at the bank that allowed him to build up fraudulent positions and hide them," she said.
12) The bank said the trader had misled investors in 2007 and 2008 through a "scheme of elaborate fictitious transactions." The trader, who was not named, used his knowledge of the group's security systems to conceal his fraudulent positions, the statement said.
13) The man admitted to the fraud, the bank said, and was being dismissed. Four or five of his supervisors were to leave the group. Bouton offered his resignation but it was rejected by the board.
14) The trader had worked for the bank since 2000 and earned a salary and bonus of less than euro100,000 (US$145,700), executives said.
15) "I'm convinced he acted alone," said Jean-Pierre Mustier, chief executive of the bank's corporate and investment banking, who interviewed the trader when the fraud was uncovered.
16) The trader was responsible for basic futures hedging on European equity market indices, the company said. That means he made bets on how the markets would perform at a future date.
17) The Bank of France, the country's central bank, said it was immediately informed of the fraud and was investigating.
18) The trader had until last year been betting that markets would fall, but then changed his position at the start of this year to bet they would rise, said Kinner Lakhani, an analyst at ABN Amro in London who specialises in Societe Generale shares, citing the bank's management.
19) He said there had been "daily rumors" this week that something was afoot at Societe Generale. "The market was sniffing something," he said.
20) Because the trader previously had worked in trading accounting offices, "he would have known how the risk management worked," Lakhani added. In a long conference call with analysts on Thursday morning, bank officials "talked about this guy bypassing systems and setting up false counter-trades."
21) "Everyone clearly is very surprised, to say the least," he said.
22) Futures trading began with selling commodities like sugar or oil to be delivered at a specified date in the future. It has expanded enormously in recent years to include many kinds of extremely complex financial instruments, but the company statement said he was involved in "plain vanilla" or the more basic forms of hedging.
23) The fraud appeared to be the largest ever by a single trader. If confirmed, it would far outstrip the Nick Leeson trading scandal in 1995 that bankrupted British bank Barings. Barings collapsed after Leeson, the bank's Singapore general manager of futures trading, lost 860 million pounds -- then worth US$1.38 billion -- on Asian futures markets, wiping out the bank's cash reserves. The company had been in business for more than 230 years.
24) The fraud was not as big as the 1991 scandal that led to the demise of the Bank of Credit and Commerce International. Claims by depositors and creditors there exceeded US$10 billion at the time.
25) International bank regulators seized BCCI, which had headquarters in Luxembourg, London and the Cayman Islands, on July 5, 1991. They acted on auditors' reports that described huge losses from illegal loans to corporate insiders and from trading transactions.
26) Gilles Glicenstein, president of asset management at rival French bank BNP Paribas -- France's largest -- said, "It shows that we are in a very troubled period for banks, and I think that it's in such troubled periods that difficult things happen."
27) "This is not good news for Societe Generale, but also for banks in general. It can create doubt, but at the same time in this period, we are making efforts to be transparent in order to give confidence back," he said at the World Economic Forum in Davos, Switzerland.
28) Axel Pierron, senior analyst at Celent, an international financial research and consulting firm, was stunned that 13 years after the Barings Bank collapse, something similar has happened again.
29) "The situation reveals that banks, despite the implementation of sophisticated risk management solutions, are still under the threat that an employee with a good understanding of the risk management processes can getting round them to hide his losses," he said.
30) At Societe Generale, the fraud announcement came on the back of subprime-related difficulties. Subprime writedowns linked to the crisis in financial markets amounted to euro2.05 billion (US$2.99 billion), Societe Generale said.
31) As a result, the bank is planning a capital hike in the "following weeks" by selling shares in a rights offer underwritten by JPMorgan Chase & Co. and Morgan Stanley. Following the transaction, the bank's Tier 1 ratio, a measure of its financial strength, will rise to 8 percent from 6.7 percent.
32) The write-down and losses will lead the company to post a net profit of euro600 million to euro800 million (US$874 million to US$1.16 billion) for all of 2007, the Paris-based bank said.
33) Full-year results will be announced Feb. 21. In 2006, net profit was euro5.2 billion.
Trader named in Societe Generale banking fraud case
(APW_ENG_20080124.1058)
1) The trader behind euro4.9 billion (US$7.14 billion) in fraud-related losses at French banking giant Societe Generale was Jerome Kerviel, a person with knowledge of the case said Thursday.
2) Kerviel is at the center of the fraud case the bank uncovered last weekend, the person said, speaking on condition of anonymity because of the sensitivity of the still-developing case.
3) Earlier, bank officials had said the trader was a Frenchman in his 30s.
4) One of his former teachers, Gisele Reynaud, described Kerviel as a "brilliant" student. She taught him at a university in Lyon, where he graduated in 2000 after an intensive year-long course in how to track, monitor and keep account for the type of trades that he went on to do at Societe Generale.
5) She said the course was very technical and intense, and included accounting, information technology and law.
6) "He was a nice guy," Reynaud said. "He was brilliant."
Societe Generale uncovers massive fraud by futures trader
(APW_ENG_20080124.1169)
1) French bank Societe Generale sought charges Thursday against a futures trader it said committed a euro4.9 billion (US$7.14 billion) fraud -- one of history's biggest -- involving a scheme of fictitious transactions.
2) CEO Daniel Bouton said that the trader's motivations were "irrational," netting the trader no personal financial gains.
3) A person familiar with the case named the trader as Jerome Kerviel. Bank officials said the trader was a Frenchman in his 30s who probably acted alone. The person spoke on condition of anonymity because of the sensitivity of the case.
4) The bombshell announcement destabilized a major bank already exposed to the subprime crisis. France's second largest bank by market value said it would be forced to seek euro5.5 billion (US$8.02 billion) in new capital.
5) Societe Generale filed a complaint Thursday with a court in Nanterre west of Paris accusing the trader of fraudulent falsification of banking records, use of such records, and computer fraud, the bank said in a statement. If an investigating judge takes on the case, the trader could face charges and possible prison time or fines.
6) The Paris prosecutor opened a preliminary investigation Thursday based on a complaint filed by a small shareholder concerned about losses incurred because of the fraud, a judicial official said.
7) Trading in Societe Generale's shares, which have lost nearly half their value over the past six months, was suspended on the Paris bourse Thursday morning. Trading resumed midday, with shares dropping 5.5 percent to euro74.77 ($108.97)
8) Societe Generale said it detected the fraud -- comparable to a full year of the bank's profits in stable times -- at its French markets division the weekend of Jan. 19-20.
9) Once uncovered, Bouton said the bank alerted market regualors and moved immediately to close the trader's positions, incurring heavy losses amid sharp declines on world markets.
10) "This is a bad time for banks and the industry in general. But detecting the fraud over the weekend was problematic because world stock markets on Monday and Tuesday fell hugely around the world. When the positions had to be unwound, the bank did that in a terrible market of falling equities," said Janine Dow, senior director at Fitch Ratings financial institution group in Paris
11) "In hindsight, it was this guy's superior knowledge of the control system of every aspect of trading at the bank that allowed him to build up fraudulent positions and hide them," she said.
12) The bank said the trader had misled investors in 2007 and 2008 through a "scheme of elaborate fictitious transactions." The trader, who was not named, used his knowledge of the group's security systems to conceal his fraudulent positions, the statement said.
13) The man admitted to the fraud, the bank said, and was being dismissed. Four or five of his supervisors were to leave the group. Bouton offered his resignation but it was rejected by the board.
14) The trader had worked for the bank since 2000 and earned a salary and bonus of less than euro100,000 (US$145,700), executives said.
15) "I'm convinced he acted alone," said Jean-Pierre Mustier, chief executive of the bank's corporate and investment banking, who interviewed the trader when the fraud was uncovered.
16) The trader was responsible for basic futures hedging on European equity market indexes, the company said. That means he made bets on how the markets would perform at a future date.
17) The Bank of France, the country's central bank, said it was immediately informed of the fraud and was investigating.
18) The trader had until last year been betting that markets would fall, but then changed his position at the start of this year to bet they would rise, said Kinner Lakhani, an analyst at ABN Amro in London who specialises in Societe Generale shares, citing the bank's management.
19) He said there had been "daily rumors" this week that something was afoot at Societe Generale. "The market was sniffing something," he said.
20) Because the trader previously had worked in trading accounting offices, "he would have known how the risk management worked," Lakhani added. In a long conference call with analysts on Thursday morning, bank officials "talked about this guy bypassing systems and setting up false counter-trades."
21) "Everyone clearly is very surprised, to say the least," he said.
22) Futures trading began with selling commodities like sugar or oil to be delivered at a specified date in the future. It has expanded enormously in recent years to include many kinds of extremely complex financial instruments, but the company statement said he was involved in "plain vanilla" or the more basic forms of hedging.
23) The fraud appeared to be the largest ever by a single trader. If confirmed, it would far outstrip the Nick Leeson trading scandal in 1995 that bankrupted British bank Barings. Barings collapsed after Leeson, the bank's Singapore general manager of futures trading, lost 860 million pounds -- then worth US$1.38 billion -- on Asian futures markets, wiping out the bank's cash reserves. The company had been in business for more than 230 years.
24) The fraud was not as big as the 1991 scandal that led to the demise of the Bank of Credit and Commerce International. Claims by depositors and creditors there exceeded US$10 billion at the time.
25) International bank regulators seized BCCI, which had headquarters in Luxembourg, London and the Cayman Islands, on July 5, 1991. They acted on auditors' reports that described huge losses from illegal loans to corporate insiders and from trading transactions.
26) Gilles Glicenstein, president of asset management at rival French bank BNP Paribas -- France's largest -- said, "It shows that we are in a very troubled period for banks, and I think that it's in such troubled periods that difficult things happen."
27) "This is not good news for Societe Generale, but also for banks in general. It can create doubt, but at the same time in this period, we are making efforts to be transparent in order to give confidence back," he said at the World Economic Forum in Davos, Switzerland.
28) Axel Pierron, senior analyst at Celent, an international financial research and consulting firm, was stunned that 13 years after the Barings Bank collapse, something similar has happened again.
29) "The situation reveals that banks, despite the implementation of sophisticated risk management solutions, are still under the threat that an employee with a good understanding of the risk management processes can getting round them to hide his losses," he said.
30) At Societe Generale, the fraud announcement came on the back of subprime-related difficulties. Subprime writedowns linked to the crisis in financial markets amounted to euro2.05 billion (US$2.99 billion), Societe Generale said.
31) As a result, the bank is planning a capital hike in the "following weeks" by selling shares in a rights offer underwritten by JPMorgan Chase & Co. and Morgan Stanley. Following the transaction, the bank's Tier 1 ratio, a measure of its financial strength, will rise to 8 percent from 6.7 percent.
32) The write-down and losses will lead the company to post a net profit of euro600 million to euro800 million (US$874 million to US$1.16 billion) for all of 2007, the Paris-based bank said.
33) Full-year results will be announced Feb. 21. In 2006, net profit was euro5.2 billion.
Union officials: Societe Generale trader suffered
(APW_ENG_20080124.1218)
1) Trader Jerome Kerviel, who racked up euro4.9 billion (US$7.14 billion) in fraud-related losses for Societe Generale bank, has been suffering from "family problems," according to three union officials briefed Thursday by management.
2) An official close to the bank, France's second-largest, confirmed that Kerviel, a Frenchman in his 30s, is at the center of the fraud case uncovered last weekend.
3) Union officials representing employees at the bank -- Michel Marchet of CGT, Alain Treviglio of CFDT and Pascal Colin of CFTC -- said managers who briefed them Thursday about the case told them that the trader was having "family problems."
4) Treviglio said the trader "might have lost his mind a bit."
5) One of his former teachers, Gisele Reynaud, described Kerviel as a "brilliant" student. She taught him at a university in Lyon, where he graduated in 2000 after an intensive year-long course in how to track, monitor and keep account of the type of trades that he went on to do at Societe Generale.
6) She said the course was very technical and intense, and included accounting, information technology and law.
7) "He was a nice guy," Reynaud said. "He was brilliant."
8) The trader had worked for the bank since 2000 and earned a salary and bonus of less than euro100,000 (US$145,700), executives said. The bank said he netted no personal financial gains from his operations.
9) Marchet of the CGT said his union was concerned that Kerviel may have been trying to get spectacular results as a way to boost his bonus, and he said the system of bonuses for traders is "something we want to talk about with management."
10) "It's possible that he took positions with exaggerated risks, and when he had losses he tried to hide them -- but with the stock market crisis, and an error that he seems to have committed, he was found out," Marchet said.
11) Kerviel has a page on the Internet site Facebook but no public photo posted.
12) Outside the Societe Generale offices at Paris' La Defense business district, employees expressed shock, and several who had shares in the company said they were worried about their investments.
13) Treviglio, of the CFDT, said staff were baffled as to how a lone trader with relatively little experience could have committed such large-scale fraud.
14) Since the bank insisted that Kerviel did not profit personally, Treviglio struggled to understand his motives: "Was it to hurt the company?" he wondered.
A look at some major trading frauds
(APW_ENG_20080124.1220)
1) The futures trader who allegedly bilked French bank Societe Generale out of euro4.9 billion (US$7.14 billion) is the latest in a list of rogue traders credited with billions of dollars in fraudulent dealings. Here is a glance of some major cases:
2) -- 2008: French bank Societe Generale uncovers an alleged euro4.9 billion (US$7.14 billion) fraud by a futures trader, Jerome Kerviel, who fooled regulators and overstepped his authority.
3) -- 2002: Former currency trader accused of hiding US$691 million in losses at Allfirst bank of Baltimore, at the time under parent Allied Irish Bank, pleads guilty to one of the largest bank fraud cases in U.S. history.
4) -- 1996: Sumitomo, a global metals trader, discovered $2.6 billion in losses from unauthorized trades in September 1996, and traced them to unauthorized trades made by one of its own traders, Yasuo Hamanaka. After the announcement, copper prices plunged.
5) -- 1995: Collapse of Britain's Barings Bank after a trader in Singapore, Nick Leeson, lost 860 million pounds (then worth US$1.38 billion) on futures trades. The fraud prompted banks worldwide to tighten internal checks.
6) -- 1991: Bank of Credit and Commerce International (BCCI), operating in nearly 70 countries, is seized by bank regulators, acting on auditors' reports of huge losses from illegal loans to corporate insiders and from trading transactions. Some 250,000 depositors left without funds. Claims exceeded US$10 billion.
A look at some major trading frauds
(APW_ENG_20080124.1224)
1) The futures trader who allegedly bilked French bank Societe Generale out of euro4.9 billion (US$7.14 billion) is the latest in a list of rogue traders credited with billions of dollars in fraudulent dealings. Here is a glance of some major cases:
2) -- 2008: French bank Societe Generale uncovers an alleged euro4.9 billion (US$7.14 billion) fraud by a futures trader, Jerome Kerviel, who fooled regulators and overstepped his authority.
3) -- 2002: Former currency trader John Rusnak accused of hiding US$691 million in losses at Allfirst bank of Baltimore, at the time under parent Allied Irish Bank, pleads guilty to one of the largest bank fraud cases in U.S. history.
4) -- 1996: Sumitomo, a global metals trader, discovered $2.6 billion in losses from unauthorized trades in September 1996, and traced them to unauthorized trades made by one of its own traders, Yasuo Hamanaka. After the announcement, copper prices plunged.
5) -- 1995: Collapse of Britain's Barings Bank after a trader in Singapore, Nick Leeson, lost 860 million pounds (then worth US$1.38 billion) on futures trades. The fraud prompted banks worldwide to tighten internal checks.
6) -- 1991: Bank of Credit and Commerce International (BCCI), operating in nearly 70 countries, is seized by bank regulators, acting on auditors' reports of huge losses from illegal loans to corporate insiders and from trading transactions. Some 250,000 depositors left without funds. Claims exceeded US$10 billion.
Union officials: Societe Generale trader suffered
(APW_ENG_20080124.1342)
1) Trader Jerome Kerviel, said by Societe Generale bank to have racked up euro4.9 billion (US$7.14 billion) in fraud-related losses, had been suffering from "family problems," according to three union officials briefed Thursday by management.
2) An official close to the bank, France's second-largest, confirmed that Kerviel, a Frenchman in his 30s, is at the center of the fraud case uncovered last weekend.
3) Union officials representing employees at the bank -- Michel Marchet of CGT, Alain Treviglio of CFDT and Pascal Colin of CFTC -- said managers who briefed them Thursday about the case told them that the trader was having "family problems."
4) Treviglio said the trader "might have lost his mind a bit."
5) One of his former teachers, Gisele Reynaud, described Kerviel as a "brilliant" student. She taught him at a university in Lyon, where he graduated in 2000 after an intensive year-long course in how to track, monitor and keep account of the type of trades that he went on to do at Societe Generale.
6) She said the course was very technical and intense, and included accounting, information technology and law.
7) "He was a nice guy," Reynaud said. "He was brilliant."
8) The trader had worked for the bank since 2000 and earned a salary and bonus of less than euro100,000 (US$145,700), executives said. The bank said he netted no personal financial gains from his operations.
9) Marchet of the CGT said his union was concerned that Kerviel may have been trying to get spectacular results as a way to boost his bonus, and he said the system of bonuses for traders is "something we want to talk about with management."
10) "It's possible that he took positions with exaggerated risks, and when he had losses he tried to hide them -- but with the stock market crisis, and an error that he seems to have committed, he was found out," Marchet said.
11) Kerviel has a page on the Internet site Facebook but no public photo posted.
12) Outside the Societe Generale offices at Paris' La Defense business district, employees expressed shock, and several who had shares in the company said they were worried about their investments.
13) Treviglio, of the CFDT, said staff were baffled as to how a lone trader with relatively little experience could have committed such large-scale fraud.
14) Since the bank insisted that Kerviel did not profit personally, Treviglio struggled to understand his motives: "Was it to hurt the company?" he wondered.
Societe Generale uncovers massive fraud by futures trader
(APW_ENG_20080124.1443)
1) In what appears to be the largest trading fraud ever carried out by a single person, a futures trader at French bank Societe Generale is accused of making unauthorized transactions that cost the bank euro4.9 billion (US$7.18 billion) after a bad bet that markets would rise.
2) The discovery, made as markets began to plunge, places the young Frenchman at the pinnacle of the rogue trader pantheon in a case with an intriguing wrinkle: The bank, France's second-largest, said he appears to have netted no personal gain from the scheme.
3) Undetected by the bank's multilayered security systems, Jerome Kerviel, a 31-year old junior trader, had for over a year been fraudulently using the company's funds to bet on European stock markets, Societe Generale said.
4) The bank said it learned of the fraud last weekend. The timing could not have been worse: Money markets suffered their blackest day since the Sept. 11, 2001, terror attacks on Monday, meaning Societe Generale was forced to sell the contracts built up by the rogue trader just as stocks were plunging. It took the bank three days to unload them.
5) The losses, Societe Generale announced Thursday, amounted to euro4.9 billion (US$7.18 billion) -- making Kerviel one of history's biggest banking frauds and prompting immediate calls for tighter regulation of the industry.
6) The trader was compared to Nick Leeson, who in 1995 bankrupted British bank Barings. Barings collapsed after Leeson, the bank's Singapore general manager of futures trading, lost 860 million pounds -- then worth US$1.38 billion -- on Asian futures markets, wiping out the bank's cash reserves. The company had been in business for more than 230 years.
7) Though the losses at Societe Generale are greater than at Barings, Chief Executive Daniel Bouton insisted that the bank is still financially sound.
8) The company said it expects to post a net profit of euro600 million to euro800 million (US$874 million to US$1.16 billion) for all of 2007 -- even after the fraud and another euro2.05 billion (US$2.99 billion) lost in the subprime mortgage crisis that has also roiled markets.
9) As a result, the bank said it would be forced to raise euro5.5 billion (US$8.02 billion) in new capital.
10) Among the many questions where how and why Kerviel perpetrated what the bank described as fraud "exceptional in its size and nature."
11) Bouton said the trader's motivations were "totally irrational," netting him no personal financial gains. It remains unclear whether he was acting out of malevolence, ambition or some other reason.
12) Three union officials representing Societe Generale employees said managers at the bank who briefed them about the fraud told them Kerviel was having "family problems."
13) One of the labor leaders, Alain Treviglio of CFDT union, said the trader "might have lost his mind a bit."
14) Employed by Societe General since 2000, Kerviel worked his way up from a supporting role in an office that monitors trades to a job on the more glamorous futures desk where he invested the bank's own money by hedging on European equity market indices. That means he made bets on how the markets would perform at a future date.
15) Futures trading -- which began with selling commodities like sugar or oil to be delivered at a specified date in the future -- has expanded enormously in recent years to include many kinds of extremely complex financial instruments.
16) Kerviel, however, was involved in "plain vanilla" or the more basic forms of hedging with what the bank described as "limited authority." He took home a relatively modest salary and bonus of less than euro100,000 (US$145,700).
17) Going beyond his role, Kerviel took "massive fraudulent directional positions" in various futures contracts, the bank said, betting at the start of this year that markets would rise.
18) Using his knowledge of Societe Generale's control systems, gleaned in his former monitoring role, he escaped detection. Most of his positions went unnoticed by colleagues and superiors as Kerviel covered his tracks with what the bank described as a "scheme of elaborate fictitious transactions."
19) He got caught when markets dropped, exposing him in contracts where he had bet on a rise.
20) Kerviel, described as a "brilliant" student by one of his former university teachers, both shocked and impressed executives with the complexity and scale of his trades. Bouton called the fraud "extraordinarily sophisticated."
21) Jean-Pierre Mustier, chief executive of the bank's corporate and investment banking, who interviewed Kerviel when the fraud was uncovered, said he is convinced the trader acted alone.
22) Analysts were stunned to hear of fraud at the award-winning bank. In 2007, Societe Generale's corporate and investment banking unit won the Equity Derivatives House of the Year award by The Banker magazine -- for the fifth year in a row.
23) Axel Pierron, a senior analyst with Celent, said it was "astonishing" that 13 years "after the Barings Bank collapse, something similar has happened again."
24) "The situation reveals that banks, despite the implementation of sophisticated risk management solutions, are still under the threat that an employee with a good understanding of the risk management processes can getting round them to hide his losses."
25) After admitting to the fraud, Kerviel was dismissed along with his superiors, Societe General said. Bouton's offer to resign was rejected by the board.
26) Societe Generale filed a legal complaint Thursday accusing the trader of fraudulent falsification of banking records, use of such records and computer fraud.
27) Elisabeth Meyer, Kerviel's lawyer, said on French television network BFM that he "is not fleeing" and is "available for judicial authorities," without specifying where he was.
28) According to the lawyer, Kerviel said he had been suspended on Sunday, and was awaiting the written notification of that suspension.
29) The Bank of France, the country's central bank, said it was immediately informed of the fraud and was investigating. Its governor, Christian Noyer, said the trader had an abnormal knowledge of Societe Generale's trading systems, and measures would have to be taken to prevent this happening again.
30) Traders are usually kept to tight spending limits, told "you may trade this much and no more," said Robert Kolb, a professor of finance at Loyola University Chicago and co-author of "Futures, Options, and Swaps" and other books.
31) But those controls apparently failed in this case.
32) The trader's actions were "like Bill Gates putting a giant chunk of his personal fortune at risk," Kolb said. "This guy was in this 30s, so even if he was a hotshot young trader, there's just no way that he could have had real permission to put that much at risk."
33) He said he expected "a lot of soul searching" in the industry about how the trader got away with it. He predicted that one upshot of the scandal might be new measures to prevent people who have previously monitored traders later becoming traders themselves -- as was the case here.
34) "It shows that we are in a very troubled period for banks, and I think that it's in such troubled periods that difficult things happen," said Gilles Glicenstein, president of asset management at rival French bank BNP Paribas -- France's largest.
35) "This is not good news for Societe Generale, but also for banks in general. It can create doubt, but at the same time in this period, we are making efforts to be transparent in order to give confidence back," he said, speaking at the World Economic Forum in Davos, Switzerland, the annual gathering of chief executives from all over the world.
36) Societe Generale's shares, which have lost nearly half their value over the past six months, were suspended on the Paris bourse Thursday morning. Trading resumed midday, with shares dropping 4.13 percent to close at euro75.81 (US$111.16).
37) Founded in 1864 after a decree signed by Napolean III, Societe Generale is now present in 77 countries and employs 120,000 people.
38) The fraud was not as big as the 1991 scandal that led to the demise of the Bank of Credit and Commerce International. Claims by depositors and creditors there exceeded US$10 billion at the time.
39) International bank regulators seized BCCI, which had headquarters in Luxembourg, London and the Cayman Islands, on July 5, 1991. They acted on auditors' reports that described huge losses from illegal loans to corporate insiders and from trading transactions.
Union officials: Societe Generale trader suffered
(APW_ENG_20080124.1533)
1) Trader Jerome Kerviel, said by Societe Generale bank to have racked up euro4.9 billion (US$7.14 billion) in fraud-related losses, had been suffering from "family problems," according to three union officials briefed Thursday by management.
2) Kerviel, a Frenchman in his 30s, is at the center of the fraud case uncovered last weekend. His lawyer Elisabeth Meyer said on French television network BFM that he "is not fleeing" and is "available for judicial authorities," without specifying where he was.
3) Union officials representing employees at the bank -- Michel Marchet of CGT, Alain Treviglio of CFDT and Pascal Colin of CFTC -- said managers who briefed them Thursday about the case told them that the trader was having "family problems."
4) Treviglio said the trader "might have lost his mind a bit."
5) One of his former teachers, Gisele Reynaud, described Kerviel as a "brilliant" student. She taught him at a university in Lyon, where he graduated in 2000 after an intensive year-long course in how to track, monitor and keep account of the type of trades that he went on to do at Societe Generale.
6) She said the course was very technical and intense, and included accounting, information technology and law.
7) "He was a nice guy," Reynaud said. "He was brilliant."
8) The trader had worked for the bank since 2000 and earned a salary and bonus of less than euro100,000 (US$145,700), executives said. The bank said he netted no personal financial gains from his operations.
9) Marchet of the CGT said his union was concerned that Kerviel may have been trying to get spectacular results as a way to boost his bonus, and he said the system of bonuses for traders is "something we want to talk about with management."
10) "It's possible that he took positions with exaggerated risks, and when he had losses he tried to hide them -- but with the stock market crisis, and an error that he seems to have committed, he was found out," Marchet said.
11) Kerviel has a page on the Internet site Facebook but no public photo posted.
12) Outside the Societe Generale offices at Paris' La Defense business district, employees expressed shock, and several who had shares in the company said they were worried about their investments.
13) Treviglio, of the CFDT, said staff were baffled as to how a lone trader with relatively little experience could have committed such large-scale fraud.
14) Since the bank insisted that Kerviel did not profit personally, Treviglio struggled to understand his motives: "Was it to hurt the company?" he wondered.
2008-01-25
Societe Generale uncovers massive fraud by futures trader
(APW_ENG_20080125.0039)
1) In what appears to be the largest trading fraud ever carried out by a single person, a futures trader at French bank Societe Generale is accused of making unauthorized transactions that cost the bank euro4.9 billion (US$7.18 billion) after a bad bet that markets would rise.
2) The discovery, made as markets began to plunge, places the young Frenchman at the pinnacle of the rogue trader pantheon in a case with an intriguing wrinkle: The bank, France's second-largest, said he appears to have netted no personal gain from the scheme.
3) Undetected by the bank's multilayered security systems, Jerome Kerviel, a 31-year old junior trader, had for over a year been fraudulently using the company's funds to bet on European stock markets, Societe Generale said.
4) The bank said it learned of the fraud last weekend. The timing could not have been worse: Money markets suffered their blackest day since the Sept. 11, 2001, terror attacks on Monday, meaning Societe Generale was forced to sell the contracts built up by the rogue trader just as stocks were plunging. It took the bank three days to unload them.
5) The losses, Societe Generale announced Thursday, amounted to euro4.9 billion (US$7.18 billion) -- making Kerviel one of history's biggest banking frauds and prompting immediate calls for tighter regulation of the industry.
6) The trader was compared to Nick Leeson, who in 1995 bankrupted British bank Barings. Barings collapsed after Leeson, the bank's Singapore general manager of futures trading, lost 860 million pounds -- then worth US$1.38 billion -- on Asian futures markets, wiping out the bank's cash reserves. The company had been in business for more than 230 years.
7) Though the losses at Societe Generale are greater than at Barings, Chief Executive Daniel Bouton insisted that the bank is still financially sound.
8) The company said it expects to post a net profit of euro600 million to euro800 million (US$874 million to US$1.16 billion) for all of 2007 -- even after the fraud and another euro2.05 billion (US$2.99 billion) lost in the subprime mortgage crisis that has also roiled markets.
9) As a result, the bank said it would be forced to raise euro5.5 billion (US$8.02 billion) in new capital.
10) Among the many questions where how and why Kerviel perpetrated what the bank described as fraud "exceptional in its size and nature."
11) Bouton said the trader's motivations were "totally irrational," netting him no personal financial gains. It remains unclear whether he was acting out of malevolence, ambition or some other reason.
12) Three union officials representing Societe Generale employees said managers at the bank who briefed them about the fraud told them Kerviel was having "family problems."
13) One of the labor leaders, Alain Treviglio of CFDT union, said the trader "might have lost his mind a bit."
14) Employed by Societe General since 2000, Kerviel worked his way up from a supporting role in an office that monitors trades to a job on the more glamorous futures desk where he invested the bank's own money by hedging on European equity market indices. That means he made bets on how the markets would perform at a future date.
15) Futures trading -- which began with selling commodities like sugar or oil to be delivered at a specified date in the future -- has expanded enormously in recent years to include many kinds of extremely complex financial instruments.
16) Kerviel, however, was involved in "plain vanilla" or the more basic forms of hedging with what the bank described as "limited authority." He took home a relatively modest salary and bonus of less than euro100,000 (US$145,700).
17) Going beyond his role, Kerviel took "massive fraudulent directional positions" in various futures contracts, the bank said, betting at the start of this year that markets would rise.
18) Using his knowledge of Societe Generale's control systems, gleaned in his former monitoring role, he escaped detection. Most of his positions went unnoticed by colleagues and superiors as Kerviel covered his tracks with what the bank described as a "scheme of elaborate fictitious transactions."
19) He got caught when markets dropped, exposing him in contracts where he had bet on a rise.
20) Kerviel, described as a "brilliant" student by one of his former university teachers, both shocked and impressed executives with the complexity and scale of his trades. Bouton called the fraud "extraordinarily sophisticated."
21) Jean-Pierre Mustier, chief executive of the bank's corporate and investment banking, who interviewed Kerviel when the fraud was uncovered, said he is convinced the trader acted alone.
22) Analysts were stunned to hear of fraud at the award-winning bank. In 2007, Societe Generale's corporate and investment banking unit won the Equity Derivatives House of the Year award by The Banker magazine -- for the fifth year in a row.
23) Axel Pierron, a senior analyst with Celent, said it was "astonishing" that 13 years "after the Barings Bank collapse, something similar has happened again."
24) "The situation reveals that banks, despite the implementation of sophisticated risk management solutions, are still under the threat that an employee with a good understanding of the risk management processes can getting round them to hide his losses."
25) After admitting to the fraud, Kerviel was dismissed along with his superiors, Societe General said. Bouton's offer to resign was rejected by the board.
26) Societe Generale filed a legal complaint Thursday accusing the trader of fraudulent falsification of banking records, use of such records and computer fraud.
27) Elisabeth Meyer, Kerviel's lawyer, said on French television network BFM that he "is not fleeing" and is "available for judicial authorities," without specifying where he was.
28) According to the lawyer, Kerviel said he had been suspended on Sunday, and was awaiting the written notification of that suspension.
29) The Bank of France, the country's central bank, said it was immediately informed of the fraud and was investigating. Its governor, Christian Noyer, said the trader had an abnormal knowledge of Societe Generale's trading systems, and measures would have to be taken to prevent this happening again.
30) Traders are usually kept to tight spending limits, told "you may trade this much and no more," said Robert Kolb, a professor of finance at Loyola University Chicago and co-author of "Futures, Options, and Swaps" and other books.
31) But those controls apparently failed in this case.
32) The trader's actions were "like Bill Gates putting a giant chunk of his personal fortune at risk," Kolb said. "This guy was in this 30s, so even if he was a hotshot young trader, there's just no way that he could have had real permission to put that much at risk."
33) He said he expected "a lot of soul searching" in the industry about how the trader got away with it. He predicted that one upshot of the scandal might be new measures to prevent people who have previously monitored traders later becoming traders themselves -- as was the case here.
34) "It shows that we are in a very troubled period for banks, and I think that it's in such troubled periods that difficult things happen," said Gilles Glicenstein, president of asset management at rival French bank BNP Paribas -- France's largest.
35) "This is not good news for Societe Generale, but also for banks in general. It can create doubt, but at the same time in this period, we are making efforts to be transparent in order to give confidence back," he said, speaking at the World Economic Forum in Davos, Switzerland, the annual gathering of chief executives from all over the world.
36) Societe Generale's shares, which have lost nearly half their value over the past six months, were suspended on the Paris bourse Thursday morning. Trading resumed midday, with shares dropping 4.13 percent to close at euro75.81 (US$111.16).
37) Founded in 1864 after a decree signed by Napolean III, Societe Generale is now present in 77 countries and employs 120,000 people.
38) The fraud was not as big as the 1991 scandal that led to the demise of the Bank of Credit and Commerce International. Claims by depositors and creditors there exceeded US$10 billion at the time.
39) International bank regulators seized BCCI, which had headquarters in Luxembourg, London and the Cayman Islands, on July 5, 1991. They acted on auditors' reports that described huge losses from illegal loans to corporate insiders and from trading transactions.
Union officials: Societe Generale trader suffered
(APW_ENG_20080125.0042)
1) Trader Jerome Kerviel, said by Societe Generale bank to have racked up euro4.9 billion (US$7.14 billion) in fraud-related losses, had been suffering from "family problems," according to three union officials briefed by management.
2) Kerviel, a Frenchman in his 30s, is at the center of the fraud case uncovered last weekend. His lawyer Elisabeth Meyer said on French television network BFM that he "is not fleeing" and is "available for judicial authorities," without specifying where he was.
3) Union officials representing employees at the bank -- Michel Marchet of CGT, Alain Treviglio of CFDT and Pascal Colin of CFTC -- said managers who briefed them Thursday about the case told them that the trader was having "family problems."
4) Treviglio said the trader "might have lost his mind a bit."
5) One of his former teachers, Gisele Reynaud, described Kerviel as a "brilliant" student. She taught him at a university in Lyon, where he graduated in 2000 after an intensive year-long course in how to track, monitor and keep account of the type of trades that he went on to do at Societe Generale.
6) She said the course was very technical and intense, and included accounting, information technology and law.
7) "He was a nice guy," Reynaud said. "He was brilliant."
8) The trader had worked for the bank since 2000 and earned a salary and bonus of less than euro100,000 (US$145,700), executives said. The bank said he netted no personal financial gains from his operations.
9) Marchet of the CGT said his union was concerned that Kerviel may have been trying to get spectacular results as a way to boost his bonus, and he said the system of bonuses for traders is "something we want to talk about with management."
10) "It's possible that he took positions with exaggerated risks, and when he had losses he tried to hide them -- but with the stock market crisis, and an error that he seems to have committed, he was found out," Marchet said.
11) Kerviel has a page on the Internet site Facebook but no public photo posted.
12) Outside the Societe Generale offices at Paris' La Defense business district, employees expressed shock, and several who had shares in the company said they were worried about their investments.
13) Treviglio, of the CFDT, said staff were baffled as to how a lone trader with relatively little experience could have committed such large-scale fraud.
14) Since the bank insisted that Kerviel did not profit personally, Treviglio struggled to understand his motives: "Was it to hurt the company?" he wondered.
Societe Generale uncovers massive fraud by futures trader
(APW_ENG_20080125.0198)
1) In what appears to be the largest trading fraud ever carried out by a single person, a futures trader at French bank Societe Generale is accused of making unauthorized transactions that cost the bank euro4.9 billion (US$7.18 billion) after a bad bet that markets would rise.
2) The discovery, made as markets began to plunge, places the young Frenchman at the pinnacle of the rogue trader pantheon in a case with an intriguing wrinkle: The bank, France's second-largest, said he appears to have netted no personal gain from the scheme.
3) Undetected by the bank's multilayered security systems, Jerome Kerviel, a 31-year old junior trader, had for over a year been fraudulently using the company's funds to bet on European stock markets, Societe Generale said.
4) The bank said it learned of the fraud last weekend. The timing could not have been worse: Money markets suffered their blackest day since the Sept. 11, 2001, terror attacks on Monday, meaning Societe Generale was forced to sell the contracts built up by the rogue trader just as stocks were plunging. It took the bank three days to unload them.
5) The losses, Societe Generale announced Thursday, amounted to euro4.9 billion (US$7.18 billion) -- making Kerviel one of history's biggest banking frauds and prompting immediate calls for tighter regulation of the industry.
6) The trader was compared to Nick Leeson, who in 1995 bankrupted British bank Barings. Barings collapsed after Leeson, the bank's Singapore general manager of futures trading, lost 860 million pounds -- then worth US$1.38 billion -- on Asian futures markets, wiping out the bank's cash reserves. The company had been in business for more than 230 years.
7) Though the losses at Societe Generale are greater than at Barings, Chief Executive Daniel Bouton insisted that the bank is still financially sound.
8) The company said it expects to post a net profit of euro600 million to euro800 million (US$874 million to US$1.16 billion) for all of 2007 -- even after the fraud and another euro2.05 billion (US$2.99 billion) lost in the subprime mortgage crisis that has also roiled markets.
9) As a result, the bank said it would be forced to raise euro5.5 billion (US$8.02 billion) in new capital.
10) Moody's Investors Service late Thursday downgraded Societe Generale's bank financial strength rating to "B-" from "B" and assigned a "negative" outlook to the rating, which means the rating could be cut later. Moody's also downgraded the bank's long-term debt and deposit ratings to "Aa2" from "Aa1" but kept those ratings' outlooks "stable."
11) The downgrade was primarily driven by the fraud losses but also follows Societe Generale's announcement of the credit-related write-downs, Moody's said.
12) Among the many questions where how and why Kerviel perpetrated what the bank described as fraud "exceptional in its size and nature."
13) Bouton said the trader's motivations were "totally irrational," netting him no personal financial gains. It remains unclear whether he was acting out of malevolence, ambition or some other reason.
14) Three union officials representing Societe Generale employees said managers at the bank who briefed them about the fraud told them Kerviel was having "family problems."
15) One of the labor leaders, Alain Treviglio of CFDT union, said the trader "might have lost his mind a bit."
16) Employed by Societe General since 2000, Kerviel worked his way up from a supporting role in an office that monitors trades to a job on the more glamorous futures desk where he invested the bank's own money by hedging on European equity market indices. That means he made bets on how the markets would perform at a future date.
17) Futures trading -- which began with selling commodities like sugar or oil to be delivered at a specified date in the future -- has expanded enormously in recent years to include many kinds of extremely complex financial instruments.
18) Kerviel, however, was involved in "plain vanilla" or the more basic forms of hedging with what the bank described as "limited authority." He took home a relatively modest salary and bonus of less than euro100,000 (US$145,700).
19) Going beyond his role, Kerviel took "massive fraudulent directional positions" in various futures contracts, the bank said, betting at the start of this year that markets would rise.
20) Using his knowledge of Societe Generale's control systems, gleaned in his former monitoring role, he escaped detection. Most of his positions went unnoticed by colleagues and superiors as Kerviel covered his tracks with what the bank described as a "scheme of elaborate fictitious transactions."
21) He got caught when markets dropped, exposing him in contracts where he had bet on a rise.
22) Kerviel, described as a "brilliant" student by one of his former university teachers, both shocked and impressed executives with the complexity and scale of his trades. Bouton called the fraud "extraordinarily sophisticated."
23) Jean-Pierre Mustier, chief executive of the bank's corporate and investment banking, who interviewed Kerviel when the fraud was uncovered, said he is convinced the trader acted alone.
24) Analysts were stunned to hear of fraud at the award-winning bank. In 2007, Societe Generale's corporate and investment banking unit won the Equity Derivatives House of the Year award by The Banker magazine -- for the fifth year in a row.
25) Axel Pierron, a senior analyst with Celent, said it was "astonishing" that 13 years "after the Barings Bank collapse, something similar has happened again."
26) "The situation reveals that banks, despite the implementation of sophisticated risk management solutions, are still under the threat that an employee with a good understanding of the risk management processes can getting round them to hide his losses."
27) After admitting to the fraud, Kerviel was dismissed along with his superiors, Societe General said. Bouton's offer to resign was rejected by the board.
28) Societe Generale filed a legal complaint Thursday accusing the trader of fraudulent falsification of banking records, use of such records and computer fraud.
29) Elisabeth Meyer, Kerviel's lawyer, said on French television network BFM that he "is not fleeing" and is "available for judicial authorities," without specifying where he was.
30) According to the lawyer, Kerviel said he had been suspended on Sunday, and was awaiting the written notification of that suspension.
31) The Bank of France, the country's central bank, said it was immediately informed of the fraud and was investigating. Its governor, Christian Noyer, said the trader had an abnormal knowledge of Societe Generale's trading systems, and measures would have to be taken to prevent this happening again.
32) Traders are usually kept to tight spending limits, told "you may trade this much and no more," said Robert Kolb, a professor of finance at Loyola University Chicago and co-author of "Futures, Options, and Swaps" and other books.
33) But those controls apparently failed in this case.
34) The trader's actions were "like Bill Gates putting a giant chunk of his personal fortune at risk," Kolb said. "This guy was in this 30s, so even if he was a hotshot young trader, there's just no way that he could have had real permission to put that much at risk."
35) He said he expected "a lot of soul searching" in the industry about how the trader got away with it. He predicted that one upshot of the scandal might be new measures to prevent people who have previously monitored traders later becoming traders themselves -- as was the case here.
36) "It shows that we are in a very troubled period for banks, and I think that it's in such troubled periods that difficult things happen," said Gilles Glicenstein, president of asset management at rival French bank BNP Paribas -- France's largest.
37) "This is not good news for Societe Generale, but also for banks in general. It can create doubt, but at the same time in this period, we are making efforts to be transparent in order to give confidence back," he said, speaking at the World Economic Forum in Davos, Switzerland, the annual gathering of chief executives from all over the world.
38) Societe Generale's shares, which have lost nearly half their value over the past six months, were suspended on the Paris bourse Thursday morning. Trading resumed midday, with shares dropping 4.13 percent to close at euro75.81 (US$111.16).
39) Founded in 1864 after a decree signed by Napolean III, Societe Generale is now present in 77 countries and employs 120,000 people.
40) The fraud was not as big as the 1991 scandal that led to the demise of the Bank of Credit and Commerce International. Claims by depositors and creditors there exceeded US$10 billion at the time.
41) International bank regulators seized BCCI, which had headquarters in Luxembourg, London and the Cayman Islands, on July 5, 1991. They acted on auditors' reports that described huge losses from illegal loans to corporate insiders and from trading transactions.
Societe Generale apologizes to shareholders through letter in newspapers
(APW_ENG_20080125.0444)
1) Societe Generale bank's chief executive took out newspaper ads Friday begging shareholders to accept his "apologies and deep regrets" after a trader at the bank was accused of fraud costing the company euro4.9 billion (US$7.18 billion).
2) The bank has accused a 31-year-old junior trader, Jerome Kerviel, in what appears to be the largest trading fraud ever carried out by a single person. In a baffling twist, the bank said he appears to have netted no personal financial gain from the alleged schemes.
3) "I understand your disappointment, your anger," Chief Executive Daniel Bouton wrote in the full-page advertisements. "This situation is perfectly unacceptable. I am aware of what the drop in the share price means for you. I ask you to accept my apologies and my deep regrets."
4) Bouton said the trader used "simple" transactions that he covered up with "extremely sophisticated and varied techniques."
5) Undetected by the bank's multilayered security systems, Kerviel had for over a year been fraudulently using the company's funds to bet on European stock markets, Societe Generale said.
6) The bank, France's second-largest, said it learned of the fraud last weekend. With money markets in turmoil, Societe Generale was forced to sell the contracts built up by the rogue trader just as stocks were plunging. It took three days to sell them.
7) With questions swirling over how the euro4.9 billion loss could have stemmed from the work of a single man, Christian Noyer, governor of the Bank of France, insisted Friday the sum had "nothing to do with the subprime crisis, with the difficulties of the financial market in general."
8) On RTL radio, he said the vast size of the loss was just "chance."
9) "If there hadn't been a collapse in the markets early in the week, the size of the loss would have been much smaller," he said.
10) Societe Generale filed a legal complaint Thursday accusing the trader of fraudulent falsification of banking records, use of such records and computer fraud. Elisabeth Meyer, Kerviel's lawyer, said on French television network BFM that he "is not fleeing" and is "available for judicial authorities," without specifying where he was.
11) Many questions remain as to where, how and why Kerviel perpetrated what the bank described as fraud "exceptional in its size and nature." It remains unclear whether he was acting out of malevolence, ambition or some other reason. Three union officials representing Societe Generale employees said managers at the bank who briefed them about the fraud told them Kerviel was having "family problems."
12) Employed by Societe General since 2000, Kerviel worked his way up from a supporting role in an office that monitors trades to a job on the more glamorous futures desk where he invested the bank's own money by hedging on European equity market indices. That means he made bets on how the markets would perform at a future date.
13) Thierry Mavic, mayor of the western French town of Pont-L'Abbe where Kerviel grew up, described him as "someone with his head on his shoulders, someone thoughtful, a young man with no issues," in an interview with RTL.
14) The trader was compared to Nick Leeson, who in 1995 bankrupted British bank Barings. Barings collapsed after Leeson, the bank's Singapore general manager of futures trading, lost 860 million pounds -- then worth US$1.38 billion -- on Asian futures markets, wiping out the bank's cash reserves. The company had been in business for more than 230 years.
15) Though Societe Generale's loss is greater than Barings', Bouton insisted that the bank is still financially sound and said he was convinced of the continuing confidence of clients "and the bank's ability to bounce back." Bouton's letter of apology appeared in Le Figaro, Les Echos et La Tribune newspapers.
16) The company said it expects to post a net profit of euro600 million to euro800 million (US$874 million to US$1.16 billion) for all of 2007 -- even after the fraud and another euro2.05 billion (US$2.99 billion) lost in the subprime mortgage crisis that has also roiled markets.
17) As a result, the bank said it would be forced to raise euro5.5 billion (US$8.02 billion) in new capital.
18) Kerviel both shocked and impressed executives with the complexity and scale of his trades. Using his knowledge of Societe Generale's control systems, gleaned in his former monitoring role, he escaped detection. Most of his positions went unnoticed by colleagues and superiors as Kerviel covered his tracks with what the bank described as a "scheme of elaborate fictitious transactions."
19) Founded in 1864 after a decree signed by Napoleon III, Societe Generale is now present in 77 countries and employs 120,000 people.
Rogue trader: a
(APW_ENG_20080125.0604)
1) Little in the background of Jerome Kerviel suggested he would go on to become apparently one of the biggest rogue traders of all time. And the big question remains: What caused him to carry out massive allegedly fraudulent trades that France's second-largest bank says cost it billions?
2) A day after Societe Generale revealed that the 31-year-old had committed fraud "exceptional in its size and nature," many pieces of the puzzle were still missing. There was no reply at the flat in the posh suburb of Paris where neighbors said he had lived, and a note to reporters had been scotch-taped to a row of mail boxes in the entrance hall of the modest four-story building. One mail box still bore Kerviel's name.
3) "Don't search here. He has been seeking refuge elsewhere probably for some time now," said the handwritten note.
4) The mayor of the Brittany town where Kerviel grew up described him as a "poised, calm, thoughtful young man" but also "a little reserved."
5) "I'm bowled over," the mayor of Pont-l'Abbe, Thierry Mavic, told a local newspaper, Le Telegramme. The mayor said Kerviel's father had worked as a teacher and that his mother had run a hair salon.
6) He said Kerviel left Pont-l'Abbe to study after college "but he often came back" and that he had married "two or three years ago."
7) The apartment building where neighbors said he had lived was surprisingly modest for a trader on the glamorous futures trading desk of the award-winning bank. Societe Generale said Kerviel was involved in "plain vanilla" trading -- the more basic forms -- and had "limited authority." He took home a relatively modest salary and bonus of less than euro100,000 (US$145,700).
8) A woman who lives on the second floor said she used to bump into Kerviel occasionally. She described him as good-looking, polite and well-dressed and said he used to get on well with her dog. She said she had not seen him for about three weeks. The woman did not give her name.
9) "He apparently leaves very early in the morning and comes home very late at night," said Jacqueline Cuny, another neighbor who said she had lived in the building for 40 years and that Kerviel had been there for "about three or four," although she had never met him during that time.
10) It was unclear how recently Kerviel had lived there. The note on the mail boxes said his apartment had been sublet. Cuny said a maid used to come to clean the flat once a week, "but I haven't seen her for about 10 days now."
11) Anne Gillier, who works in a nearby real estate agency, said she had regularly seen Kerviel in the neighborhood -- although not for the past one or two months -- and that he stood out because he was "handsome" and well-dressed.
12) "He was physically seductive, always elegantly dressed. But he was always alone," she said. "I never saw him with a woman, or even with another man, I always saw him alone."
13) Employed by Societe General since 2000, Kerviel worked his way up from a supporting role in an office that monitors trades to a job on the futures desk where he invested the bank's money by hedging on European equity market indices. That means he made bets on how the markets would perform at a future date.
14) Going beyond his role, Kerviel took "massive fraudulent directional positions" in various futures contracts, the bank said, betting at the start of this year that markets would rise. The bank says his actions cost it euro4.9 billion (US$7.18 billion). It has not explained his motivations and said the transactions didn't earn him any money.
15) Using his knowledge of Societe Generale's control systems, gleaned in his former monitoring role, he escaped detection. Most of his positions went unnoticed by colleagues and superiors as Kerviel covered his tracks with what the bank described as a "scheme of elaborate fictitious transactions."
16) He got caught when markets dropped, exposing him in contracts where he had bet on a rise.
17) Kerviel, described as a "brilliant" student by one of his former university teachers, both shocked and impressed executives with the complexity and scale of his trades. The bank's CEO called the fraud "extraordinarily sophisticated."
French bank trader was dealing in tens of billions of euros
(APW_ENG_20080125.0640)
1) The rogue futures trader who cost French bank Societe Generale euro4.9 billion (US$7.14 billion) had been betting on a much larger scale -- with tens of billions of euros, the bank said Friday.
2) France's No. 2 bank apologized to shareholders after announcing what appears to be the biggest-ever trading fraud carried out by a single person. The news Thursday rattled an already jittery banking sector at a time of global market uncertainty.
3) The scale of the alleged fraud grew clearer Friday, when a bank official said 31-year-old trader Jerome Kerviel's positions had reached "several tens of billions of euros" -- a staggering sum for a bank whose market capitalization is euro35.9 billion (US$52.6 billion). The official spoke on condition of anonymity in line with bank policy on such matters.
4) In a baffling twist, the bank said he appears to have netted no personal financial gain from the alleged schemes.
5) The bank's CEO took out newspaper ads Friday begging shareholders to accept his "apologies and deep regrets."
6) "I understand your disappointment, your anger," Chief Executive Daniel Bouton wrote in the full-page advertisements. "This situation is perfectly unacceptable."
7) Societe Generale's shares, which have lost nearly half their value over the past six months, were suspended on the Paris bourse Thursday morning. When trading resumed, shares fell 4.13 percent to close at euro75.81 (US$111.16). Friday morning, shares were trading up 0.15 percent at euro75.93 (US$111.34).
8) On Friday, UBS downgraded the bank to neutral from buy. Deutsche Bank also downgraded the stock, to hold from buy.
9) Undetected by the bank's multilayered security systems, Kerviel had for over a year been fraudulently using the company's funds to bet on European stock markets, Societe Generale said.
10) The bank said it learned of the fraud last weekend. With money markets in turmoil, Societe Generale was forced to sell the contracts built up by the rogue trader just as stocks were plunging. It took three days to unload them.
11) During a visit to India, President Nicolas Sarkozy said the bank's problem "is an internal fraud that had consequences on Societe Generale's results but, as the governor of the Bank of France says, has not affected the solidity and reliability of the French financial system," Sarkozy said.
12) Sarkozy said he plans to make proposals Tuesday at a dinner in London with other European leaders on how to boost transparency in the financial world and encourage the "moral improvement of financial capitalism."
13) With questions swirling over how the euro4.9 billion loss could have stemmed from the work of a single man, the Bank of France governor insisted Friday the sum had "nothing to do with the subprime crisis, with the difficulties of the financial market in general."
14) On RTL radio, Christian Noyer said the vast size of the loss was just "chance."
15) "If there hadn't been a collapse in the markets early in the week, the size of the loss would have been much smaller," he said.
16) Societe Generale filed a legal complaint Thursday accusing the trader of fraudulent falsification of banking records, use of such records and computer fraud. Elisabeth Meyer, Kerviel's lawyer, said on French television network BFM that he "is not fleeing" and is "available for judicial authorities," without specifying where he was.
17) Many questions remain as to how and why Kerviel perpetrated what the bank described as fraud "exceptional in its size and nature." It remains unclear whether he was acting out of malevolence, ambition or some other reason. Three union officials representing Societe Generale employees said managers at the bank who briefed them about the fraud told them Kerviel was having "family problems."
18) Employed by Societe General since 2000, Kerviel worked his way up from a supporting role in an office that monitors trades to a job on the more glamorous futures desk where he invested the bank's own money by hedging on European equity market indices. That means he made bets on how the markets would perform at a future date.
19) Thierry Mavic, mayor of the western French town of Pont-L'Abbe where Kerviel grew up, described him as "someone with his head on his shoulders, thoughtful, a young man with no issues," in an interview with RTL.
20) Kerviel both shocked and impressed executives with the complexity and scale of his trades. Using his knowledge of Societe Generale's control systems, gleaned in his former monitoring role, he escaped detection. Most of his positions went unnoticed by colleagues and superiors as Kerviel covered his tracks.
21) The trader was compared to Nick Leeson, who in 1995 bankrupted British bank Barings. Barings collapsed after Leeson, the bank's Singapore general manager of futures trading, lost 860 million pounds -- then worth US$1.38 billion -- on Asian futures markets, wiping out the bank's cash reserves. The company had been in business for more than 230 years.
22) Though Societe Generale's loss is greater than Barings', Bouton insisted that the bank is still financially sound and said he was convinced of the continuing confidence of clients "and the bank's ability to bounce back."
23) The company said it expects to post a net profit of euro600 million to euro800 million (US$874 million to US$1.16 billion) for all of 2007 -- even after the fraud and another euro2.05 billion (US$2.99 billion) lost in the subprime mortgage crisis that has also roiled markets.
24) As a result, the bank said it would be forced to raise euro5.5 billion (US$8.02 billion) in new capital.
25) Founded in 1864 after a decree signed by Napoleon III, Societe Generale is now present in 77 countries and employs 120,000 people.
Rogue trader: a
(APW_ENG_20080125.0729)
1) Little in the background of Jerome Kerviel suggested he would go on to become apparently one of the biggest rogue traders of all time. And the big question remains: What caused him to carry out massive allegedly fraudulent trades that France's second-largest bank says cost it billions?
2) A day after Societe Generale revealed that the 31-year-old had committed fraud "exceptional in its size and nature," many pieces of the puzzle were still missing. Family and acquaintances in his hometown described him as poised and trustworthy, recalling that he practiced judo as a teenager and helped teach it to children.
3) There was no reply at the flat in the posh suburb of Paris where neighbors said he had lived, and a note to reporters had been scotch-taped to a row of mail boxes in the entrance hall of the modest four-story building. One mail box still bore Kerviel's name.
4) "Don't search here. He has been seeking refuge elsewhere probably for some time now," said the handwritten note.
5) In the Brittany town of Pont l'Abbe where Kerviel grew up, his former judo teacher remembered him as a serious, helpful teenager.
6) "He came in to train two or three times a week, and he also helped out with classes for kids," said Philippe Orhant, who has not seen his former student in about 10 years. "I liked him a lot, and I had total confidence in him."
7) Kerviel's family said he was unmarried. His father died two years ago, an aunt, Raymonde Kerviel, said. Three union officials at the bank said managers told them Kerviel had suffered from recent family problems that appeared to have deeply affected him.
8) Kerviel's mother traveled to the Paris area on Thursday, when the bank revealed the scandal, to see her son, "because he wasn't doing well," said another aunt, Sylviane Kerviel.
9) "Jerome has done nothing wrong," she said. "He was a reserved, serious child. He didn't pocket a cent, I'm sure of it."
10) The town's mayor described him as a "poised, calm, thoughtful young man." Kerviel had supported his election campaign in 2001.
11) "I'm bowled over," Mayor Thierry Mavic told a local newspaper, Le Telegramme. The mayor said Kerviel's father had worked as a teacher and that his mother had run a hair salon.
12) In the Paris suburb of Neuilly, the apartment building where neighbors said he had lived was surprisingly modest for a trader on the glamorous futures trading desk of the award-winning bank. Societe Generale said Kerviel was involved in "plain vanilla" trading -- the more basic forms -- and had "limited authority." He took home a relatively modest salary and bonus of less than euro100,000 (US$145,700).
13) A woman who lives on the second floor said she used to bump into Kerviel occasionally. She described him as good-looking, polite and well-dressed and said he used to get on well with her dog. She said she had not seen him for about three weeks. The woman did not give her name.
14) "He apparently leaves very early in the morning and comes home very late at night," said Jacqueline Cuny, another neighbor who said she had lived in the building for 40 years and that Kerviel had been there for "about three or four," although she had never met him during that time.
15) It was unclear how recently Kerviel had lived there. The note on the mail boxes said his apartment had been sublet.
16) Anne Gillier, who works in a nearby real estate agency, said she had regularly seen Kerviel in the neighborhood -- although not for the past one or two months -- and that he stood out because he was "handsome" and well-dressed.
17) "He was physically seductive, always elegantly dressed. But he was always alone," she said. "I never saw him with a woman, or even with another man, I always saw him alone."
18) No one picked up at what was believed to be Kerviel's mobile telephone number. "Hello, you have reached Jerome's mobile, I'm not available at the moment," said an even and steady man's voice in the recorded message.
19) Employed by Societe General since 2000, Kerviel worked his way up from a supporting role in an office that monitors trades to a job on the futures desk where he invested the bank's money by hedging on European equity market indices. That means he made bets on how the markets would perform at a future date.
20) Going beyond his role, Kerviel took "massive fraudulent directional positions" in various futures contracts, the bank said, betting at the start of this year that markets would rise. The bank says his actions cost it euro4.9 billion (US$7.18 billion). It has not explained his motivations and said the transactions didn't earn him any money.
21) Using his knowledge of Societe Generale's control systems, gleaned in his former monitoring role, he escaped detection. Most of his positions went unnoticed by colleagues and superiors as Kerviel covered his tracks with what the bank described as a "scheme of elaborate fictitious transactions."
22) He got caught when markets dropped, exposing him in contracts where he had bet on a rise.
23) Kerviel, described as a "brilliant" student by one of his former university teachers, both shocked and impressed executives with the complexity and scale of his trades. The bank's CEO called the fraud "extraordinarily sophisticated."
French bank trader was dealing in tens of billions of euros
(APW_ENG_20080125.0788)
1) The rogue futures trader who cost French bank Societe Generale euro4.9 billion (US$7.14 billion) had been betting on a much larger scale -- with tens of billions of euros, the bank said Friday.
2) France's No. 2 bank apologized to shareholders after announcing what appears to be the biggest-ever trading fraud carried out by a single person. The news Thursday rattled an already jittery banking sector at a time of global market uncertainty.
3) The scale of the alleged fraud grew clearer Friday, when a bank official said 31-year-old trader Jerome Kerviel's positions had reached "several tens of billions of euros" -- a staggering sum for a bank whose market capitalization is euro35.9 billion (US$52.6 billion). The official spoke on condition of anonymity in line with bank policy on such matters.
4) French presidential aide Raymond Soubie said on LCI television that the trader had been dealing with more than euro50 billion ($73.31 billion) -- a figure not much smaller than Slovakia's annual GDP, according to the IMF.
5) In a baffling twist, the bank said he appears to have netted no personal financial gain from the alleged schemes. His lawyer said on French television that he was not fleeing, but did not reveal his whereabouts.
6) Paris prosecutors were conducting a preliminary investigation that combines two legal complaints, judicial officials said: one by Societe Generale accusing the trader of fraud, another by small shareholders in the bank demanding to know how the fraud transpired. It was unclear whether and when Kerviel could be questioned in the probe.
7) Societe Generale's shares, which have lost nearly half their value over the past six months, were suspended on the Paris bourse Thursday morning. When trading resumed, shares fell 4.13 percent to close at euro75.81 (US$111.16). Friday afternoon, shares were trading up 2.4 percent at euro77.66 ($113.87).
8) On Friday, UBS downgraded the bank to neutral from buy. Deutsche Bank also downgraded the stock, to hold from buy.
9) However, Dresdner Kleinwort analysts Milan Gudka and Arturo De Frias said the bank's announcement "provides us with greater visibility and comfort. Despite our concern as to the adequacy of internal controls, we keep a positive recommendation on the stock."
10) Undetected by the bank's multilayered security systems, Kerviel had for over a year been fraudulently using the company's funds to bet on European stock markets, Societe Generale said.
11) The bank said it learned of the fraud last weekend. With money markets in turmoil, Societe Generale was forced to sell the contracts built up by the rogue trader just as stocks were plunging. It took three days to unload them.
12) During a visit to India, President Nicolas Sarkozy said the bank's problem "is an internal fraud that had consequences on Societe Generale's results but ... has not affected the solidity and reliability of the French financial system," Sarkozy said.
13) Sarkozy said he plans to make proposals Tuesday at a dinner in London with other European leaders on how to boost transparency in the financial world and encourage the "moral improvement of financial capitalism."
14) With questions swirling over how the euro4.9 billion loss could have stemmed from the work of a single man, the Bank of France governor insisted Friday the sum had "nothing to do with the subprime crisis, with the difficulties of the financial market in general."
15) On RTL radio, Christian Noyer said the vast size of the loss was just "chance."
16) "If there hadn't been a collapse in the markets early in the week, the size of the loss would have been much smaller," he said.
17) French Prime Minister Francois Fillon was among the skeptics.
18) "It is difficult .. to imagine how one person alone could, in a relatively short period of time, cause such considerable losses," Fillon said in Luxembourg.
19) He also suggested the French government should have been informed immediately, instead of four days after the fraud was discovered.
20) Small shareholders had many questions.
21) "One should not be able to take positions worth 40 billion without being spotted by an audit or a sophisticated computer system, every one agrees on that," said Didier Cornardeau, president of APPAC, a group representing small Societe General shareholders.
22) "We understand that there is an important disfunction in Societe General, and perhaps in other banks as well. This problem has to be clarified. Junior traders have to be supervised by senior traders, that's a crucial point."
23) CEO Daniel Bouton took out newspaper ads Friday begging shareholders to accept his "apologies and deep regrets."
24) It remains unclear whether Kerviel was acting out of malevolence, ambition or some other reason. Three union officials representing Societe Generale employees said managers at the bank who briefed them about the fraud told them Kerviel was having "family problems."
25) Employed by Societe General since 2000, Kerviel worked his way up from a supporting role in an office that monitors trades to a job on the more glamorous futures desk where he invested the bank's own money by hedging on European equity market indices. That means he made bets on how the markets would perform at a future date.
26) Thierry Mavic, mayor of the western French town of Pont-L'Abbe where Kerviel grew up, described him as "someone with his head on his shoulders, thoughtful, a young man with no issues," in an interview with RTL.
27) Kerviel both shocked and impressed executives with the complexity and scale of his trades. Using his knowledge of Societe Generale's control systems, gleaned in his former monitoring role, he escaped detection. Most of his positions went unnoticed by colleagues and superiors as Kerviel covered his tracks.
28) The trader was compared to Nick Leeson, who in 1995 bankrupted British bank Barings. Barings collapsed after Leeson, the bank's Singapore general manager of futures trading, lost 860 million pounds -- then worth US$1.38 billion -- on Asian futures markets. The company had been in business for more than 230 years.
29) Though Societe Generale's loss is greater than Barings', Bouton insisted that the bank is still financially sound and said he was convinced of the continuing confidence of clients "and the bank's ability to bounce back."
30) The case raised questions sector-wide about risk management.
31) "In a bull market often the risk management does not cope with the significant growth in volumes, volatility, complexity of instruments," said Kinner Lakhani, an analyst at ABN Amro. "Pretty much every Wall Street management is definitely looking at this issue and trying to strengthen to make sure these things don't happen again.
32) The company said it expects to post a net profit of euro600 million to euro800 million (US$874 million to US$1.16 billion) for all of 2007 -- even after the fraud and another euro2.05 billion (US$2.99 billion) lost in the subprime mortgage crisis that has also roiled markets.
33) As a result, the bank said it would be forced to raise euro5.5 billion (US$8.02 billion) in new capital.
34) Founded in 1864 after a decree signed by Napoleon III, Societe Generale is now present in 77 countries and employs 120,000 people.
Rogue trader: a
(APW_ENG_20080125.0909)
1) Little in Jerome Kerviel's background suggested he would go on to become apparently one of the biggest rogue traders of all time. And the big question remains: What led him to orchestrate what France's second-largest bank describes as massive, fraudulent trades that cost it billions?
2) A day after Societe Generale revealed that the 31-year-old had committed fraud "exceptional in its size and nature," many pieces of the puzzle were still missing. Family and acquaintances in his hometown described him as poised and trustworthy, recalling that he practiced judo as a teenager and helped teach it to children. The picture from neighbors was of a man who was unusually reserved and discreet.
3) There was no reply at the flat in the posh suburb of Paris where neighbors said he had lived, and a note to reporters had been scotch-taped to a row of mail boxes in the entrance hall of the modest four-story building. One mailbox still bore Kerviel's name.
4) "Don't search here. He has been seeking refuge elsewhere probably for some time now," said the handwritten note.
5) In the Brittany town of Pont l'Abbe where Kerviel grew up, his former judo teacher remembered him as a serious, helpful teenager.
6) "He came in to train two or three times a week, and he also helped out with classes for kids," said Philippe Orhant, who has not seen his former student in about 10 years. "I liked him a lot, and I had total confidence in him."
7) Kerviel's family said he was unmarried. His father died two years ago, an aunt, Raymonde Kerviel, said. Three union officials at the bank said managers told them Kerviel had suffered from recent family problems that appeared to have deeply affected him.
8) Kerviel's mother traveled to the Paris area on Thursday, when the bank revealed the scandal, to see her son, "because he wasn't doing well," said another aunt, Sylviane Kerviel.
9) "Jerome has done nothing wrong," she said. "He was a reserved, serious child. He didn't pocket a cent, I'm sure of it."
10) The town's mayor described him as a "poised, calm, thoughtful young man." Kerviel had supported his election campaign in 2001.
11) "I'm bowled over," Mayor Thierry Mavic told a local newspaper, Le Telegramme. The mayor said Kerviel's father had worked as a teacher and that his mother had run a hair salon.
12) In the Paris suburb of Neuilly, the apartment building where neighbors said he had lived was surprisingly modest for a trader on the glamorous futures trading desk of the award-winning bank. Societe Generale said Kerviel was involved in "plain vanilla" trading -- the more basic forms -- and had "limited authority." He took home a relatively modest salary and bonus of less than euro100,000 (US$145,700).
13) He lived in a former maid's chambers converted into studios on the top floor of the walk-up, said Collette Thomas, 79, who has lived in the building for 30 years and whose apartment is one floor down from Kerviel's.
14) "He was very young, handsome, a beautiful one ... but he was not at all talkative," she said. "He didn't talk, he petted my dog, whom he adored."
15) Her daughter, Isabelle, a nurse, said she would see him about once a week. "But he didn't talk, he climbed the stairs four at a time and disappeared," she said.
16) Both said he never smiled, but held the door for them.
17) "He apparently leaves very early in the morning and comes home very late at night," said Jacqueline Cuny, another neighbor who said she had lived in the building for 40 years and that Kerviel had been there for "about three or four," although she had never met him during that time.
18) It was unclear how recently Kerviel had lived there. The note on the mail boxes said his apartment had been sublet. Genevieve Morand, 91, another neighbor in the building, said she saw him once in the last 10 days and he was carrying two briefcases.
19) Anne Gillier, who works in a nearby real estate agency, said she had regularly seen Kerviel in the neighborhood -- although not for the past one or two months -- and that he stood out because he was "handsome" and well-dressed.
20) "He was physically seductive, always elegantly dressed. But he was always alone," she said. "I never saw him with a woman, or even with another man, I always saw him alone."
21) No one picked up at what was believed to be Kerviel's mobile telephone number. "Hello, you have reached Jerome's mobile, I'm not available at the moment," said an even and steady man's voice in the recorded message.
22) Employed by Societe General since 2000, Kerviel worked his way up from a supporting role in an office that monitors trades to a job on the futures desk where he invested the bank's money by hedging on European equity market indices. That means he made bets on how the markets would perform at a future date.
23) Going beyond his role, Kerviel took "massive fraudulent directional positions" in various futures contracts, the bank said, betting at the start of this year that markets would rise. The bank says his actions cost it euro4.9 billion (US$7.18 billion). It has not explained his motivations and said the transactions didn't earn him any money. Executives said he seemed to be irrational.
24) "When we interviewed him during the night Saturday and Sunday, he imagined that he had discovered methods able to win money on the markets," said Jean-Pierre Mustier, chief executive of the bank's corporate and investment banking arm, on Thursday.
25) Using his knowledge of Societe Generale's control systems, gleaned in his former monitoring role, he escaped detection. Most of his positions went unnoticed by colleagues and superiors as Kerviel covered his tracks with what the bank described as a "scheme of elaborate fictitious transactions."
26) He got caught when markets dropped, exposing him in contracts where he had bet on a rise.
27) Kerviel, described as a "brilliant" student by one of his former university teachers, both shocked and impressed executives with the complexity and scale of his trades. The bank's CEO called the fraud "extraordinarily sophisticated."
French bank trader was dealing in tens of billions of euros
(APW_ENG_20080125.1202)
1) French bank Societe Generale revealed Friday just how serious the risk had been from a single rogue trader, saying he bet tens of billions of dollars -- even as the bank faced the challenge of raising billions more in capital in uncertain markets.
2) Small shareholders questioned the controls at Societe Generale and other leading banks. France's prime minister joined skeptics questioning whether a lone trader could have been fully responsible for such major damage.
3) France's No. 2 bank apologized Friday to shareholders in full-page newspaper ads after announcing what appears to be the biggest-ever trading fraud carried out by one person. The news Thursday rattled an already jittery banking sector.
4) The fraud cost Societe Generale euro4.9 billion (US$7.14 billion), but 31-year-old trader Jerome Kerviel's positions had reached "several tens of billions of euros," a bank official said. The official spoke on condition of anonymity because of company policy on such matters.
5) French presidential aide Raymond Soubie said on LCI television that the trader had been dealing with more than euro50 billion ($73.31 billion). That figure outstrips the bank's market capitalization of euro35.9 billion (US$52.6 billion), and is close to the annual GDP of entire nations such Slovakia, Qatar or Libya.
6) The debacle generated buzz at the World Economic Forum in Davos, Switzerland, on Friday, with executives expressing shock that it could have happened to one of Europe's most respected financial institutions. The case raised questions sector-wide about risk management.
7) "In a bull market often the risk management does not cope with the significant growth in volumes, volatility, complexity of instruments," said Kinner Lakhani, an analyst at ABN Amro. "Pretty much every Wall Street management is definitely looking at this issue."
8) The damage might not have been as bad if it had happened in a less volatile time: The bank said it learned of the fraud last weekend. With stock markets in turmoil, Societe Generale was forced to sell the contracts built up by the rogue trader just as stocks were plunging. It took three days to unload them.
9) Societe Generale's unwinding of its massive positions over the next three days could have helped the markets fall, analysts said.
10) "Any dumping will drop the price," said Mark G. Castelino, associate professor for finance and economics at Rutgers Business School in New Jersey.
11) He stopped short, however, of saying that Kerviel's actions affected the U.S. Federal Reserve chairman's subsequent decision to cut rates.
12) Societe Generale insisted it could weather the enormous loss.
13) The bank's shares, which have lost nearly half their value over the past six months, were suspended on the Paris bourse Thursday morning. When trading resumed, shares fell 4.13 percent to close at euro75.81 (US$111.16). After an up-and-down day, the shares closed down 2.5 percent at euro73.87 ($108.62).
14) On Friday, UBS downgraded the bank to neutral from buy. Deutsche Bank also downgraded the stock, to hold from buy.
15) However, Dresdner Kleinwort analysts Milan Gudka and Arturo De Frias said the bank's announcement "provides us with greater visibility and comfort. Despite our concern as to the adequacy of internal controls, we keep a positive recommendation on the stock."
16) The company, which also posted another euro2.05 billion (US$2.99 billion) subprime-related loss, planned to raise euro5.5 billion (US$8.02 billion) in new capital.
17) Asian sovereign wealth funds had shown interest in Societe Generale before the fraud was announced, but analysts said the news could make the funds think twice about a quick purchase.
18) Prosecutors opened a preliminary investigation into the bank's accusation of fraud against the trader, and into complaints by two small shareholders.
19) "One should not be able to take positions worth 40 billion without being spotted by an audit or a sophisticated computer system," said Didier Cornardeau, president of APPAC, a group representing small Societe Generale shareholders.
20) French Prime Minister Francois Fillon, meanwhile, said: "It is difficult ... to imagine how one person alone could, in a relatively short period of time, cause such considerable losses."
21) He suggested the French government should have been informed immediately, instead of four days after the fraud was discovered.
22) It remains unclear whether Kerviel was acting out of malevolence, ambition or some other reason. Three union officials representing Societe Generale employees said managers at the bank who briefed them about the fraud told them Kerviel was having "family problems."
23) Employed by Societe General since 2000, Kerviel worked his way up from a supporting role in an office that monitors trades to a job on the more glamorous futures desk where he invested the bank's own money by hedging on European equity market indices. That means he made bets on how the markets would perform at a future date.
24) Undetected by the bank's multilayered security systems, Kerviel had for over a year been fraudulently using the company's funds to bet on European stock markets, Societe Generale said.
Rogue trader: a
(APW_ENG_20080125.1216)
1) Little in Jerome Kerviel's background suggested he would go on to become apparently one of the biggest rogue traders of all time. And the big question remains: What led him to orchestrate what France's second-largest bank describes as massive, fraudulent trades that cost it billions?
2) A day after Societe Generale revealed that the 31-year-old had committed fraud "exceptional in its size and nature," many pieces of the puzzle were still missing.
3) In an apparent hunt for clues, four plainclothes police officers, trailed by a locksmith's truck, arrived Friday evening at Kerviel's apartment in a chic Paris suburb. The officers made reporters leave.
4) In his hometown, family and acquaintances described Kerviel as poised and trustworthy, recalling that he practiced judo as a teenager and helped teach it to children. The picture from neighbors was of a man who was unusually reserved and discreet.
5) There was no reply at the flat where neighbors said he had lived and a note to reporters had been scotch-taped to a row of mail boxes in the entrance hall of the modest four-story building. One mailbox still bore Kerviel's name.
6) "Don't search here. He has been seeking refuge elsewhere probably for some time now," said the handwritten note.
7) In the Brittany town of Pont l'Abbe where Kerviel grew up, his former judo teacher remembered him as a serious, helpful teenager.
8) "He came in to train two or three times a week, and he also helped out with classes for kids," said Philippe Orhant, who has not seen his former student in about 10 years. "I liked him a lot, and I had total confidence in him."
9) Kerviel's family said he was unmarried. His father died two years ago, an aunt, Raymonde Kerviel, said. Three union officials at the bank said managers told them Kerviel had suffered from recent family problems that appeared to have deeply affected him.
10) Kerviel's mother traveled to the Paris area on Thursday, when the bank revealed the scandal, to see her son, "because he wasn't doing well," said another aunt, Sylviane Kerviel.
11) "Jerome has done nothing wrong," she said. "He was a reserved, serious child. He didn't pocket a cent, I'm sure of it."
12) The town's mayor described him as a "poised, calm, thoughtful young man." Kerviel had supported his election campaign in 2001.
13) "I'm bowled over," Mayor Thierry Mavic told a local newspaper, Le Telegramme. The mayor said Kerviel's father had worked as a teacher and that his mother had run a hair salon.
14) In the Paris suburb of Neuilly, the apartment building where neighbors said he had lived was surprisingly modest for a trader on the glamorous futures trading desk of the award-winning bank. Societe Generale said Kerviel was involved in "plain vanilla" trading -- the more basic forms -- and had "limited authority." He took home a relatively modest salary and bonus of less than euro100,000 (US$145,700).
15) He lived in a former maid's chambers converted into studios on the top floor of the walk-up, said Collette Thomas, 79, who has lived in the building for 30 years and whose apartment is one floor down from Kerviel's.
16) "He was very young, handsome, a beautiful one ... but he was not at all talkative," she said. "He didn't talk, he petted my dog, whom he adored."
17) Her daughter, Isabelle, a nurse, said she would see him about once a week. "But he didn't talk, he climbed the stairs four at a time and disappeared," she said.
18) Both said he never smiled, but held the door for them.
19) "He apparently leaves very early in the morning and comes home very late at night," said Jacqueline Cuny, another neighbor who said she had lived in the building for 40 years and that Kerviel had been there for "about three or four," although she had never met him during that time.
20) It was unclear how recently Kerviel had lived there. The note on the mail boxes said his apartment had been sublet. Genevieve Morand, 91, another neighbor in the building, said she saw him once in the last 10 days and he was carrying two briefcases.
21) Anne Gillier, who works in a nearby real estate agency, said she had regularly seen Kerviel in the neighborhood -- although not for the past one or two months -- and that he stood out because he was "handsome" and well-dressed.
22) "He was physically seductive, always elegantly dressed. But he was always alone," she said. "I never saw him with a woman, or even with another man, I always saw him alone."
23) No one picked up at what was believed to be Kerviel's mobile telephone number. "Hello, you have reached Jerome's mobile, I'm not available at the moment," said an even and steady man's voice in the recorded message.
24) Employed by Societe General since 2000, Kerviel worked his way up from a supporting role in an office that monitors trades to a job on the futures desk where he invested the bank's money by hedging on European equity market indices. That means he made bets on how the markets would perform at a future date.
25) Going beyond his role, Kerviel took "massive fraudulent directional positions" in various futures contracts, the bank said, betting at the start of this year that markets would rise. The bank says his actions cost it euro4.9 billion (US$7.18 billion). It has not explained his motivations and said the transactions didn't earn him any money. Executives said he seemed to be irrational.
26) "When we interviewed him during the night Saturday and Sunday, he imagined that he had discovered methods able to win money on the markets," said Jean-Pierre Mustier, chief executive of the bank's corporate and investment banking arm, on Thursday.
27) Using his knowledge of Societe Generale's control systems, gleaned in his former monitoring role, he escaped detection. Most of his positions went unnoticed by colleagues and superiors as Kerviel covered his tracks with what the bank described as a "scheme of elaborate fictitious transactions."
28) He got caught when markets dropped, exposing him in contracts where he had bet on a rise.
29) Kerviel, described as a "brilliant" student by one of his former university teachers, both shocked and impressed executives with the complexity and scale of his trades. The bank's CEO called the fraud "extraordinarily sophisticated."
Police raid home of rogue trader described as poised, calm, thoughtful
(APW_ENG_20080125.1329)
1) Dapper and disciplined, Jerome Kerviel taught kids judo, held the door for his elderly neighbors in a posh Paris suburb -- and appears to have committed one of the biggest bank frauds in history.
2) An emerging portrait of the 31-year-old futures trader filled out details of how he lived and worked but failed to explain why he overstepped his authority at the France's Societe Generale to bet as much as euro50 billion (US$73.3 billion) of the bank's money.
3) In an apparent hunt for clues, four plainclothes police officers, trailed by a locksmith, searched Kerviel's apartment in a chic Paris suburb Friday evening. The officers used a ladder to search a false ceiling just outside the door of his apartment. They emerged more than two hours later with two cases, but did not talk to reporters.
4) Meanwhile, skeptics from his neighbors to France's prime minister questioned whether Kerviel could have manipulated such unfathomable sums -- comparable to a small country's annual economy -- all alone.
5) The bank insists he was a lone operator.
6) "When we interviewed him during the night Saturday and Sunday he imagined that he had discovered methods able to win money on the markets," said Jean-Pierre Mustier, chief executive of the bank's corporate and investment banking arm.
7) Family and acquaintances described Kerviel as poised and trustworthy, unusually reserved and discreet. His whereabouts were unknown, though his lawyer said he was not fleeing.
8) There was no reply Friday at the apartment in the wealthy suburb of Neuilly-sur-Seine, and a note to reporters had been scotch-taped to a row of mail boxes in the entrance hall of the modest four-story building. One mailbox still bore Kerviel's name.
9) "Don't search here. He has been seeking refuge elsewhere probably for some time now," said the handwritten note.
10) Police ignored the plea, showing up after nightfall to search his apartment.
11) A preliminary investigation is under way in the case following a complaint by Societe Generale accusing the trader of fraud and two complaints by minority shareholders.
12) It was unclear if and when Kerviel could be questioned in the case, which could eventually lead to prison term or fines.
13) In the Brittany town of Pont l'Abbe where Kerviel grew up, his former judo teacher remembered him as a serious, helpful teenager.
14) "He came in to train two or three times a week, and he also helped out with classes for kids," said Philippe Orhant, who has not seen his former student in about 10 years. "I liked him a lot, and I had total confidence in him."
15) Kerviel's family said he was unmarried. His father died two years ago, an aunt, Raymonde Kerviel, said. Three union officials at the bank said managers told them Kerviel had suffered from recent family problems that appeared to have deeply affected him.
16) Kerviel's mother traveled to the Paris area on Thursday, when the bank revealed the scandal, to see her son, "because he wasn't doing well," said another aunt, Sylviane Kerviel.
17) "Jerome has done nothing wrong," she said. "He was a reserved, serious child. He didn't pocket a cent, I'm sure of it."
18) The town's mayor described him as a "poised, calm, thoughtful young man." Kerviel had supported his election campaign in 2001.
19) "I'm bowled over," Mayor Thierry Mavic told a local newspaper, Le Telegramme. The mayor said Kerviel's father had worked as a teacher and that his mother had run a hair salon.
20) In Neuilly, one of France's richest towns, the apartment building was surprisingly modest for a trader on the glamorous futures trading desk of the award-winning bank. Societe Generale said Kerviel was involved in "plain vanilla" trading -- the more basic forms -- and had "limited authority." He took home a relatively modest salary and bonus of less than euro100,000 (US$145,700).
21) He lived in a former maid's chambers converted into studios on the top floor of the walk-up, said Collette Thomas, 79, who has lived in the building for 30 years and whose apartment is one floor down from Kerviel's.
22) "He was very young, handsome, a beautiful one ... but he was not at all talkative," she said. "He didn't talk, he petted my dog, whom he adored."
23) Her daughter, Isabelle, a nurse, said she would see him about once a week. "But he didn't talk, he climbed the stairs four at a time and disappeared," she said.
24) Both said he never smiled, but held the door for them.
25) "He was physically seductive, always elegantly dressed. But he was always alone," said Anne Gillier, who works in a nearby real estate agency and saw him regularly -- until recently. "I never saw him with a woman, or even with another man, I always saw him alone."
26) No one picked up at what was believed to be Kerviel's mobile telephone number. "Hello, you have reached Jerome's mobile, I'm not available at the moment," said an even and steady man's voice in the recorded message.
27) Employed by Societe General since 2000, Kerviel worked his way up from a supporting role in an office that monitors trades to a job on the futures desk where he invested the bank's money by hedging on European equity market indices.
28) Going beyond his role, Kerviel took "massive fraudulent directional positions" in various futures contracts, the bank said, betting at the start of this year that markets would rise. The bank says his actions cost it euro4.9 billion (US$7.18 billion).
29) It has not explained his motivations and said the transactions didn't earn him any money. Executives said he seemed to be irrational.
30) He escaped detection by using his knowledge of Societe Generale's control systems, gleaned in his former monitoring role, he escaped detection. He got caught when markets dropped, exposing him in contracts where he had bet on a rise.
31) Kerviel, described as a "brilliant" student by one of his former university teachers, both shocked and impressed executives with the complexity and scale of his trades. The bank's CEO called the fraud "extraordinarily sophisticated."
2008-01-26
French bank trader was dealing in tens of billions of euros
(APW_ENG_20080126.0044)
1) French bank Societe Generale revealed just how serious the risk had been from a single rogue trader, saying he bet tens of billions of dollars -- even as the bank faced the challenge of raising billions more in capital in uncertain markets.
2) Small shareholders questioned the controls at Societe Generale and other leading banks. France's prime minister joined skeptics questioning whether a lone trader could have been fully responsible for such major damage.
3) France's No. 2 bank apologized Friday to shareholders in full-page newspaper ads after announcing what appears to be the biggest-ever trading fraud carried out by one person. The news Thursday rattled an already jittery banking sector.
4) The fraud cost Societe Generale euro4.9 billion (US$7.14 billion), but 31-year-old trader Jerome Kerviel's positions had reached "several tens of billions of euros," a bank official said. The official spoke on condition of anonymity because of company policy on such matters.
5) French presidential aide Raymond Soubie said on LCI television that the trader had been dealing with more than euro50 billion ($73.31 billion). That figure outstrips the bank's market capitalization of euro35.9 billion (US$52.6 billion), and is close to the annual GDP of entire nations such Slovakia, Qatar or Libya.
6) The debacle generated buzz at the World Economic Forum in Davos, Switzerland, on Friday, with executives expressing shock that it could have happened to one of Europe's most respected financial institutions. The case raised questions sector-wide about risk management.
7) "In a bull market often the risk management does not cope with the significant growth in volumes, volatility, complexity of instruments," said Kinner Lakhani, an analyst at ABN Amro. "Pretty much every Wall Street management is definitely looking at this issue."
8) The damage might not have been as bad if it had happened in a less volatile time: The bank said it learned of the fraud last weekend. With stock markets in turmoil, Societe Generale was forced to sell the contracts built up by the rogue trader just as stocks were plunging. It took three days to unload them.
9) Societe Generale's unwinding of its massive positions over the next three days could have helped the markets fall, analysts said.
10) "Any dumping will drop the price," said Mark G. Castelino, associate professor for finance and economics at Rutgers Business School in New Jersey.
11) He stopped short, however, of saying that Kerviel's actions affected the U.S. Federal Reserve chairman's subsequent decision to cut rates.
12) Societe Generale insisted it could weather the enormous loss.
13) The bank's shares, which have lost nearly half their value over the past six months, were suspended on the Paris bourse Thursday morning. When trading resumed, shares fell 4.13 percent to close at euro75.81 (US$111.16). After an up-and-down day, the shares closed down 2.5 percent at euro73.87 ($108.62).
14) On Friday, UBS downgraded the bank to neutral from buy. Deutsche Bank also downgraded the stock, to hold from buy.
15) However, Dresdner Kleinwort analysts Milan Gudka and Arturo De Frias said the bank's announcement "provides us with greater visibility and comfort. Despite our concern as to the adequacy of internal controls, we keep a positive recommendation on the stock."
16) The company, which also posted another euro2.05 billion (US$2.99 billion) subprime-related loss, planned to raise euro5.5 billion (US$8.02 billion) in new capital.
17) Asian sovereign wealth funds had shown interest in Societe Generale before the fraud was announced, but analysts said the news could make the funds think twice about a quick purchase.
18) Prosecutors opened a preliminary investigation into the bank's accusation of fraud against the trader, and into complaints by two small shareholders.
19) "One should not be able to take positions worth 40 billion without being spotted by an audit or a sophisticated computer system," said Didier Cornardeau, president of APPAC, a group representing small Societe Generale shareholders.
20) French Prime Minister Francois Fillon, meanwhile, said: "It is difficult ... to imagine how one person alone could, in a relatively short period of time, cause such considerable losses."
21) He suggested the French government should have been informed immediately, instead of four days after the fraud was discovered.
22) It remains unclear whether Kerviel was acting out of malevolence, ambition or some other reason. Three union officials representing Societe Generale employees said managers at the bank who briefed them about the fraud told them Kerviel was having "family problems."
23) Employed by Societe General since 2000, Kerviel worked his way up from a supporting role in an office that monitors trades to a job on the more glamorous futures desk where he invested the bank's own money by hedging on European equity market indices. That means he made bets on how the markets would perform at a future date.
24) Undetected by the bank's multilayered security systems, Kerviel had for over a year been fraudulently using the company's funds to bet on European stock markets, Societe Generale said.
Police raid home of rogue trader described as poised, calm, thoughtful
(APW_ENG_20080126.0050)
1) Dapper and disciplined, Jerome Kerviel taught kids judo, held the door for his elderly neighbors in a posh Paris suburb -- and appears to have committed one of the biggest bank frauds in history.
2) An emerging portrait of the 31-year-old futures trader filled out details of how he lived and worked but failed to explain why he overstepped his authority at the France's Societe Generale to bet as much as euro50 billion (US$73.3 billion) of the bank's money.
3) In an apparent hunt for clues, four plainclothes police officers, trailed by a locksmith, searched Kerviel's apartment in a chic Paris suburb Friday evening. The officers used a ladder to search a false ceiling just outside the door of his apartment. They emerged more than two hours later with two cases, but did not talk to reporters.
4) Meanwhile, skeptics from his neighbors to France's prime minister questioned whether Kerviel could have manipulated such unfathomable sums -- comparable to a small country's annual economy -- all alone.
5) The bank insists he was a lone operator.
6) "When we interviewed him during the night Saturday and Sunday he imagined that he had discovered methods able to win money on the markets," said Jean-Pierre Mustier, chief executive of the bank's corporate and investment banking arm.
7) Family and acquaintances described Kerviel as poised and trustworthy, unusually reserved and discreet. His whereabouts were unknown, though his lawyer said he was not fleeing.
8) There was no reply Friday at the apartment in the wealthy suburb of Neuilly-sur-Seine, and a note to reporters had been scotch-taped to a row of mail boxes in the entrance hall of the modest four-story building. One mailbox still bore Kerviel's name.
9) "Don't search here. He has been seeking refuge elsewhere probably for some time now," said the handwritten note.
10) Police ignored the plea, showing up after nightfall to search his apartment.
11) A preliminary investigation is under way in the case following a complaint by Societe Generale accusing the trader of fraud and two complaints by minority shareholders.
12) It was unclear if and when Kerviel could be questioned in the case, which could eventually lead to prison term or fines.
13) In the Brittany town of Pont l'Abbe where Kerviel grew up, his former judo teacher remembered him as a serious, helpful teenager.
14) "He came in to train two or three times a week, and he also helped out with classes for kids," said Philippe Orhant, who has not seen his former student in about 10 years. "I liked him a lot, and I had total confidence in him."
15) Kerviel's family said he was unmarried. His father died two years ago, an aunt, Raymonde Kerviel, said. Three union officials at the bank said managers told them Kerviel had suffered from recent family problems that appeared to have deeply affected him.
16) Kerviel's mother traveled to the Paris area on Thursday, when the bank revealed the scandal, to see her son, "because he wasn't doing well," said another aunt, Sylviane Kerviel.
17) "Jerome has done nothing wrong," she said. "He was a reserved, serious child. He didn't pocket a cent, I'm sure of it."
18) The town's mayor described him as a "poised, calm, thoughtful young man." Kerviel had supported his election campaign in 2001.
19) "I'm bowled over," Mayor Thierry Mavic told a local newspaper, Le Telegramme. The mayor said Kerviel's father had worked as a teacher and that his mother had run a hair salon.
20) In Neuilly, one of France's richest towns, the apartment building was surprisingly modest for a trader on the glamorous futures trading desk of the award-winning bank. Societe Generale said Kerviel was involved in "plain vanilla" trading -- the more basic forms -- and had "limited authority." He took home a relatively modest salary and bonus of less than euro100,000 (US$145,700).
21) He lived in a former maid's chambers converted into studios on the top floor of the walk-up, said Collette Thomas, 79, who has lived in the building for 30 years and whose apartment is one floor down from Kerviel's.
22) "He was very young, handsome, a beautiful one ... but he was not at all talkative," she said. "He didn't talk, he petted my dog, whom he adored."
23) Her daughter, Isabelle, a nurse, said she would see him about once a week. "But he didn't talk, he climbed the stairs four at a time and disappeared," she said.
24) Both said he never smiled, but held the door for them.
25) "He was physically seductive, always elegantly dressed. But he was always alone," said Anne Gillier, who works in a nearby real estate agency and saw him regularly -- until recently. "I never saw him with a woman, or even with another man, I always saw him alone."
26) No one picked up at what was believed to be Kerviel's mobile telephone number. "Hello, you have reached Jerome's mobile, I'm not available at the moment," said an even and steady man's voice in the recorded message.
27) Employed by Societe General since 2000, Kerviel worked his way up from a supporting role in an office that monitors trades to a job on the futures desk where he invested the bank's money by hedging on European equity market indices.
28) Going beyond his role, Kerviel took "massive fraudulent directional positions" in various futures contracts, the bank said, betting at the start of this year that markets would rise. The bank says his actions cost it euro4.9 billion (US$7.18 billion).
29) It has not explained his motivations and said the transactions didn't earn him any money. Executives said he seemed to be irrational.
30) He escaped detection by using his knowledge of Societe Generale's control systems, gleaned in his former monitoring role, he escaped detection. He got caught when markets dropped, exposing him in contracts where he had bet on a rise.
31) Kerviel, described as a "brilliant" student by one of his former university teachers, both shocked and impressed executives with the complexity and scale of his trades. The bank's CEO called the fraud "extraordinarily sophisticated."
French police search Societe Generale in probe of fraud blamed on rogue trader
(APW_ENG_20080126.0258)
1) French police searched the headquarters of banking giant Societe Generale as part of a probe into massive fraud blamed on a single rogue trader, a bank official said Saturday.
2) Financial police conducted the search Friday night, said spokeswoman Stephanie Carson-Parker. She gave no other details. Police also searched the apartment of trader Jerome Kerviel, accused of fraud costing the bank euro4.9 billion (US$7.14 billion).
French police search Societe Generale in probe of fraud blamed on rogue trader
(APW_ENG_20080126.0281)
1) French police searched the headquarters of banking giant Societe Generale as part of a probe into massive fraud blamed on a single rogue trader, a bank official said Saturday.
2) Financial police conducted the search Friday night, said spokeswoman Stephanie Carson-Parker. She gave no other details. Police also searched the apartment of trader Jerome Kerviel, accused of fraud costing the bank euro4.9 billion (US$7.14 billion).
3) Paris prosecutors are conducting a preliminary investigation based on three complaints: one by the bank accusing 31-year-old Kerviel of fraud, and two by small shareholders. Kerviel's whereabouts are unknown, though his lawyer says he is not fleeing.
4) France's second-largest bank unsettled an already shaky banking sector in announcing the fraud -- which appeared to be the biggest-ever trading fraud pinned on a single person -- on Thursday.
5) On Friday, Societe Generale revealed how serious the risk had been, saying Kerviel bet tens of billions of euros of the bank's money.
6) French presidential aide Raymond Soubie said the trader had been dealing with more than euro50 billion ($73.3 billion). That figure outstrips the bank's market capitalization of euro35.9 billion (US$52.6 billion), and is close to the annual GDP of entire nations such Slovakia, Qatar or Libya.
7) France's prime minister joined skeptics questioning whether a lone trader could have been fully responsible for such major damage.
8) It remains unclear whether Kerviel was acting out of malevolence, ambition or some other reason. Three union officials representing Societe Generale employees said managers at the bank who briefed them about the fraud told them Kerviel was having "family problems."
9) The debacle generated buzz at the World Economic Forum in Davos, Switzerland, and raised questions sector-wide about risk management.
10) The damage might not have been as bad if it had happened in a less volatile time: The bank said it learned of the fraud last weekend. With stock markets in turmoil, Societe Generale was forced to sell the contracts built up by the rogue trader just as stocks were plunging.
11) Societe Generale's unwinding of its massive positions over the next three days could have helped the markets fall, analysts said.
12) The bank's CEO, Daniel Bouton, in an interview in Saturday's Le Figaro, defended its handling of the discovery and said it wasn't at fault for Monday's drama on world markets.
13) He also insisted it could weather the enormous loss.
14) The bank's shares have lost nearly half their value over the past six months. After an up-and-down day Friday, the shares closed down 2.5 percent at euro73.87 (US$108.62).
15) The company, which also posted another euro2.05 billion (US$2.99 billion) subprime-related loss, planned to raise euro5.5 billion (US$8.02 billion) in new capital.
French police search Societe Generale in probe of fraud blamed on rogue trader
(APW_ENG_20080126.0335)
1) The chief executive of France's second-largest bank insisted in an interview published Saturday that its actions after discovering massive fraud did not fuel turmoil on world markets.
2) Societe Generale was the target of a police search as investigators moved swiftly to sort out what happened. The bank unsettled the already shaky banking sector when it said that 31-year-old Jerome Kerviel had put tens of billions of euros (dollars) at risk in one of history's biggest frauds.
3) Skeptics from his neighbors to France's prime minister have questioned whether a single futures trader could have managed such unfathomable sums. Adding mystery, the bank says Kerviel may not have made any personal gain from his unauthorized trades.
4) The bank said it discovered the fraud last weekend and unwound the trader's losing bets starting Monday, when world markets tumbled. Some analysts have questioned whether Societe Generale exacerbated the fall and indirectly led to the U.S. Federal Reserve's subsequent decision to cut rates.
5) "It's absurd!" CEO Daniel Bouton said of the suggestion, in an interview with Le Figaro daily. "Anyone could calculate our contribution to the market in recent days."
6) Bouton was quoted as saying the bank, in closing the trader's unauthorized positions, respected market rules that forbid any player from intervening with sums worth more than 10 percent of a given market. The bank says that is why it took three days to close the positions.
7) The bank maintains it was the biggest loser in the case, because of the timing of the discovery.
8) Kerviel had been investing the bank's money by hedging on European equity market indices. That means he made bets on how the markets would perform at a future date.
9) Bouton said the trader had been betting throughout 2007 that markets would fall. "He was therefore winning, virtually," he said.
10) But the bank says he had overstepped his authority and was wagering more money than he should have.
11) So at the beginning of January, Bouton said, the trader voluntarily created losing positions, to neutralize his earlier gains and cover his tracks.
12) But markets dropped this month, and fast. "This sad affair veered into a Greek tragedy: His virtual losing position became huge," Bouton was quoted as saying.
13) The bank's systems discovered an anomaly on Jan. 18, he said. At midday that day, a Friday, the trader's positions were neutral, but by the end of trading that day the positions were losing euro1.8 billion, Bouton said.
14) On Sunday, the full scale of the problem was revealed to the bank's management -- "enormous and totally abnormal," Bouton said.
15) "I decided ... to close the positions and alert the supervisory authorities," he said.
16) When Asian and European markets collapsed Monday, "that had a catastrophic effect. The losses of Societe Generale became even more enormous," he was quoted as saying.
17) Ultimately it took three days to close the positions, and the bank lost euro4.9 billion (US$7.2 billion).
18) Bouton said the overall health of the bank was not at risk, comparing the situation to arson at a factory of a big manufacturer -- a devastating, but one-time, loss.
19) Asked if the bank could once again be the target of takeover speculation, he said, "It wouldn't be the first time."
20) Financial police searched the bank's headquarters Friday night, said spokeswoman Stephanie Carson-Parker. She gave no other details. Police also searched Kerviel's apartment.
21) Paris prosecutors are conducting a preliminary investigation based on three complaints: one by the bank accusing 31-year-old Kerviel of fraud, and two by small shareholders. Kerviel's whereabouts are unknown, though his lawyer says he is not fleeing.
22) French presidential aide Raymond Soubie said the trader had been dealing with more than euro50 billion (US$73.3 billion). That figure outstrips the bank's market capitalization of euro35.9 billion (US$52.6 billion), and is close to the annual GDP of entire nations such Slovakia, Qatar or Libya.
23) It remains unclear whether Kerviel's actions, if proved, were out of malevolence, ambition or some other reason. Three union officials representing Societe Generale employees said managers at the bank who briefed them about the fraud told them Kerviel was having family problems.
24) The debacle generated buzz at the World Economic Forum in Davos, Switzerland, and raised questions sector-wide about risk management.
25) The bank's shares have lost nearly half their value over the past six months. After an up-and-down day Friday, the shares closed down 2.5 percent at euro73.87 ($108.62).
26) The company, which also posted another euro2.05 billion (US$2.99 billion) subprime-related loss, planned to raise euro5.5 billion (US$8.02 billion) in new capital.
French police soon to question trader blamed by Societe General for massive fraud
(APW_ENG_20080126.0424)
1) French financial police will soon question a trader blamed by France's Societe General bank for a massive fraud, judicial officials said Saturday.
2) Trader Jerome Kerviel's whereabouts were not publicly known following Societe Generale's announcement last Thursday that he was behind a fraud costing the bank euro4.9 billion (US$7.14 billion). Kerviel's lawyer has maintained he is not on the run and is available for questioning.
3) Judicial officials, speaking on condition of anonymity because the investigation is ongoing, did not specify when 31-year-old Kerviel would be questioned, saying only it would be in the near future. French news reports said it would likely take place over the weekend.
4) Paris prosecutors are conducting a preliminary investigation based on three complaints: one by the bank accusing Kerviel of fraud, and two by small shareholders.
5) Societe Generale said it discovered the fraud last weekend and unwound the trader's losing bets starting Monday, when world markets tumbled.
6) Some analysts have questioned whether Societe Generale exacerbated the fall and indirectly led to the U.S. Federal Reserve's subsequent decision to cut rates.
7) In an interview published Saturday, Societe Generale's chief executive, Daniel Bouton, insisted the bank's actions after discovering the fraud did not fuel turmoil on world markets.
8) "It's absurd!" CEO Daniel Bouton said of the suggestion, in an interview with Le Figaro daily. "Anyone could calculate our contribution to the market in recent days."
9) Bouton was quoted as saying the bank, in closing the trader's unauthorized positions, respected market rules that forbid any player from intervening with sums worth more than 10 percent of a given market. The bank says that is why it took three days to close the positions.
10) The bank maintains it was the biggest loser in the case, because of the timing of the discovery.
11) Kerviel had been investing the bank's money by hedging on European equity market indices. That means he made bets on how the markets would perform at a future date.
12) Bouton said the trader had been betting throughout 2007 that markets would fall. "He was therefore winning, virtually," he said.
13) But the bank says he had overstepped his authority and was wagering more money than he should have.
14) So at the beginning of January, Bouton said, the trader voluntarily created losing positions, to neutralize his earlier gains and cover his tracks.
15) But markets dropped this month, and fast. "This sad affair veered into a Greek tragedy: His virtual losing position became huge," Bouton was quoted as saying.
16) The bank's systems discovered an anomaly on Jan. 18, he said. At midday that day, a Friday, the trader's positions were neutral, but by the end of trading that day the positions were losing euro1.8 billion, Bouton said.
17) On Sunday, the full scale of the problem was revealed to the bank's management -- "enormous and totally abnormal," Bouton said.
18) "I decided ... to close the positions and alert the supervisory authorities," he said.
19) When Asian and European markets collapsed Monday, "that had a catastrophic effect. The losses of Societe Generale became even more enormous," he was quoted as saying.
20) Ultimately it took three days to close the positions, and the bank lost euro4.9 billion (US$7.2 billion).
21) Bouton said the overall health of the bank was not at risk, comparing the situation to arson at a factory of a big manufacturer -- a devastating, but one-time, loss.
22) Asked if the bank could once again be the target of takeover speculation, he said, "It wouldn't be the first time."
23) Financial police searched the bank's headquarters Friday night, said spokeswoman Stephanie Carson-Parker. She gave no other details. Police also searched Kerviel's apartment.
24) French presidential aide Raymond Soubie said the trader had been dealing with more than euro50 billion (US$73.3 billion). That figure outstrips the bank's market capitalization of euro35.9 billion (US$52.6 billion), and is close to the annual GDP of entire nations such Slovakia, Qatar or Libya.
25) Skeptics including France's prime minister have questioned whether a single futures trader could have managed such unfathomable sums. Adding mystery, the bank says Kerviel may not have made any personal gain from his unauthorized trades.
26) It remains unclear whether Kerviel's actions, if proved, were out of malevolence, ambition or some other reason. Three union officials representing Societe Generale employees said managers at the bank who briefed them about the fraud told them Kerviel was having family problems.
27) The debacle generated buzz at the World Economic Forum in Davos, Switzerland, and raised questions sector-wide about risk management.
28) The bank's shares have lost nearly half their value over the past six months. After an up-and-down day Friday, the shares closed down 2.5 percent at euro73.87 ($108.62).
29) The company, which also posted another euro2.05 billion (US$2.99 billion) subprime-related loss, planned to raise euro5.5 billion (US$8.02 billion) in new capital.
French police soon to question trader blamed by Societe General for massive fraud
(APW_ENG_20080126.0463)
1) French financial police will soon question a trader blamed by France's Societe General bank for a massive fraud, judicial officials said Saturday.
2) Trader Jerome Kerviel's whereabouts was not publicly known following Societe Generale's announcement last Thursday that he was behind a fraud that cost the bank euro4.9 billion (US$7.14 billion). Judicial officials said Kerviel's lawyer has said he is not on the run and is available for questioning.
3) Judicial officials, speaking on condition of anonymity because the investigation is continuing, did not specify when 31-year-old Kerviel would be questioned, saying only it would be in the near future. French news reports said it would likely take place over the weekend.
4) Judicial officials confirmed police conducted a search of Kerviel's apartment in the Paris suburb of Neuilly-sur-Seine. They said police also went Friday night to the bank's headquarters, where they were provided with documents relating to the investigation, officials said.
5) Paris prosecutors are conducting a preliminary investigation based on three complaints: one by the bank accusing Kerviel of fraud, and two by small shareholders.
6) Societe Generale said it discovered the fraud last weekend and unwound the trader's losing bets starting Monday, when world markets tumbled.
7) Some analysts have questioned whether Societe Generale exacerbated the fall and indirectly led to the U.S. Federal Reserve's subsequent decision to cut rates.
8) In an interview published Saturday, Societe Generale's chief executive, Daniel Bouton, insisted the bank's actions after discovering the fraud did not fuel turmoil on world markets.
9) "It's absurd!" Bouton said of the suggestion, in an interview with Le Figaro daily. "Anyone could calculate our contribution to the market in recent days."
10) Bouton was quoted as saying the bank, in closing the trader's unauthorized positions, respected market rules that forbid any player from intervening with sums worth more than 10 percent of a given market. The bank says that is why it took three days to close the positions.
11) The bank maintains it was the biggest loser in the case, because of the timing of the discovery.
12) Kerviel had been investing the bank's money by hedging on European equity market indices. That means he made bets on how the markets would perform at a future date.
13) Bouton said the trader had been betting throughout 2007 that markets would fall. "He was therefore winning, virtually," he said.
14) But the bank says he had overstepped his authority and was wagering more money than he should have.
15) So at the beginning of January, Bouton said, the trader voluntarily created losing positions, to neutralize his earlier gains and cover his tracks.
16) But markets dropped this month, and fast. "This sad affair veered into a Greek tragedy: His virtual losing position became huge," Bouton was quoted as saying.
17) The bank's systems discovered an anomaly on Jan. 18, he said. At midday that day, a Friday, the trader's positions were neutral, but by the end of trading that day the positions were losing euro1.8 billion, Bouton said.
18) On Sunday, the full scale of the problem was revealed to the bank's management -- "enormous and totally abnormal," Bouton said.
19) "I decided ... to close the positions and alert the supervisory authorities," he said.
20) When Asian and European markets collapsed Monday, "that had a catastrophic effect. The losses of Societe Generale became even more enormous," he was quoted as saying.
21) Ultimately it took three days to close the positions, and the bank lost euro4.9 billion (US$7.2 billion).
22) Bouton said the overall health of the bank was not at risk, comparing the situation to arson at a factory of a big manufacturer -- a devastating, but one-time, loss.
23) Asked if the bank could once again be the target of takeover speculation, he said, "It wouldn't be the first time."
24) French presidential aide Raymond Soubie said the trader had been dealing with more than euro50 billion (US$73.3 billion). That figure outstrips the bank's market capitalization of euro35.9 billion (US$52.6 billion), and is close to the annual GDP of entire nations such Slovakia, Qatar or Libya.
25) Skeptics including France's prime minister have questioned whether a single futures trader could have managed such unfathomable sums. Adding mystery, the bank says Kerviel may not have made any personal gain from his unauthorized trades.
26) It remains unclear whether Kerviel's actions, if proved, were out of malevolence, ambition or some other reason. Three union officials representing Societe Generale employees said managers at the bank who briefed them about the fraud told them Kerviel was having family problems.
27) The debacle generated buzz at the World Economic Forum in Davos, Switzerland, and raised questions sector-wide about risk management.
28) French Finance Minister Christine Lagarde, speaking Saturday in Davos, said she has been asked to compile a report on the fraud, Dow Jones Newswires reported.
29) Lagarde said her report will look at "the reality of facts based on real hard data," and "how and why the controls did not work" to prevent the fraud. Lagarde said the report, whose results are to be made public, will address "what additional controls should be put in place to stop it happening again," Dow Jones said.
30) Societe Generale's shares have lost nearly half their value over the past six months. After an up-and-down day Friday, the shares closed down 2.5 percent at euro73.87 ($108.62).
31) The company, which also posted another euro2.05 billion (US$2.99 billion) subprime-related loss, planned to raise euro5.5 billion (US$8.02 billion) in new capital.
Trader taken in for questioning in fraud probe at French bank Societe Generale
(APW_ENG_20080126.0485)
1) A trader blamed by French bank Societe Generale for a massive fraud was taken into custody on Saturday, judicial officials said.
2) Financial police in Paris were to question Jerome Kerviel as part of a probe into Societe Generale's announcement Thursday that the 31-year-old trader was behind a fraud costing the bank euro4.9 billion (US$7.14 billion), judicial officials said. They were speaking on condition of anonymity because the investigation is ongoing.
Trader taken in for questioning in fraud probe at French bank Societe Generale
(APW_ENG_20080126.0495)
1) A trader blamed by French bank Societe Generale for a massive fraud was taken into custody on Saturday, judicial officials said.
2) Financial police in Paris were questioning Jerome Kerviel as part of a probe into Societe Generale's announcement Thursday that the 31-year-old trader was behind a fraud costing the bank euro4.9 billion (US$7.14 billion), judicial officials said. They were speaking on condition of anonymity because the investigation is continuing.
3) It was the first time since Thursday's announcement that Kerviel's whereabouts were publicly known, despite an extensive media hunt. Journalists from around the world have staked out Kerviel's apartment, as well as relatives' homes, for days but they failed to catch a glimpse of him, prompting speculations that he was on the run.
4) Kerviel's lawyer had insisted, however, that he had not fled the country and was available for police questioning.
5) Judicial officials also confirmed police conducted a search of Kerviel's apartment in the Paris suburb of Neuilly-sur-Seine. They said police also went Friday night to the bank's headquarters, where they were provided with documents relating to the investigation, officials said.
6) Paris prosecutors are conducting a preliminary investigation based on three complaints: one by the bank accusing Kerviel of fraud, and two by small shareholders.
7) Societe Generale said it discovered the fraud last weekend and unwound the trader's losing bets starting Monday, when world markets tumbled.
8) Some analysts have questioned whether Societe Generale exacerbated the fall and indirectly led to the U.S. Federal Reserve's subsequent decision to cut rates.
9) In an interview published Saturday, Societe Generale's chief executive, Daniel Bouton, insisted the bank's actions after discovering the fraud did not fuel turmoil on world markets.
10) "It's absurd!" Bouton said of the suggestion, in an interview with Le Figaro daily. "Anyone could calculate our contribution to the market in recent days."
11) Bouton was quoted as saying the bank, in closing the trader's unauthorized positions, respected market rules that forbid any player from intervening with sums worth more than 10 percent of a given market. The bank says that is why it took three days to close the positions.
12) The bank maintains it was the biggest loser in the case, because of the timing of the discovery.
13) Kerviel had been investing the bank's money by hedging on European equity market indices. That means he made bets on how the markets would perform at a future date.
14) Bouton said the trader had been betting throughout 2007 that markets would fall. "He was therefore winning, virtually," he said.
15) But the bank says he had overstepped his authority and was wagering more money than he should have.
16) So at the beginning of January, Bouton said, the trader voluntarily created losing positions, to neutralize his earlier gains and cover his tracks.
17) But markets dropped this month, and fast. "This sad affair veered into a Greek tragedy: His virtual losing position became huge," Bouton was quoted as saying.
18) The bank's systems discovered an anomaly on Jan. 18, he said. At midday that day, a Friday, the trader's positions were neutral, but by the end of trading that day the positions were losing euro1.8 billion, Bouton said.
19) On Sunday, the full scale of the problem was revealed to the bank's management -- "enormous and totally abnormal," Bouton said.
20) "I decided ... to close the positions and alert the supervisory authorities," he said.
21) When Asian and European markets collapsed Monday, "that had a catastrophic effect. The losses of Societe Generale became even more enormous," he was quoted as saying.
22) Ultimately it took three days to close the positions, and the bank lost euro4.9 billion (US$7.2 billion).
23) Bouton said the overall health of the bank was not at risk, comparing the situation to arson at a factory of a big manufacturer -- a devastating, but one-time, loss.
24) Asked if the bank could once again be the target of takeover speculation, he said, "It wouldn't be the first time."
25) French presidential aide Raymond Soubie said the trader had been dealing with more than euro50 billion (US$73.3 billion). That figure outstrips the bank's market capitalization of euro35.9 billion (US$52.6 billion), and is close to the annual GDP of entire nations such Slovakia, Qatar or Libya.
26) Skeptics including France's prime minister have questioned whether a single futures trader could have managed such unfathomable sums. Adding mystery, the bank says Kerviel may not have made any personal gain from his unauthorized trades.
27) It remains unclear whether Kerviel's actions, if proved, were out of malevolence, ambition or some other reason. Three union officials representing Societe Generale employees said managers at the bank who briefed them about the fraud told them Kerviel was having family problems.
28) The debacle generated buzz at the World Economic Forum in Davos, Switzerland, and raised questions sector-wide about risk management.
29) French Finance Minister Christine Lagarde, speaking Saturday in Davos, said she has been asked to compile a report on the fraud, Dow Jones Newswires reported.
30) Lagarde said her report will look at "the reality of facts based on real hard data," and "how and why the controls did not work" to prevent the fraud.
31) Societe Generale's shares have lost nearly half their value over the past six months. After an up-and-down day Friday, the shares closed down 2.5 percent at euro73.87 (US$108.62).
32) The company, which also posted another euro2.05 billion (US$2.99 billion) subprime-related loss, planned to raise euro5.5 billion (US$8.02 billion) in new capital.
French police question trader implicated in massive fraud at Societe Generale bank
(APW_ENG_20080126.0693)
1) The French trader accused of one of the biggest bank frauds ever surfaced Saturday -- in the custody of police, who were questioning him about bad bets that cost France's No. 2 bank billions of euros in a season of jittery markets.
2) Financial police in Paris were questioning Jerome Kerviel in a probe into Societe Generale's allegation against the 31-year-old trader, judicial officials said. They were speaking on condition of anonymity because the investigation is continuing.
3) Under French law, he can be held up to 48 hours.
4) Kerviel has kept a low profile since the bank said Thursday that Kerviel's unauthorized trades caused it losses of euro4.9 billion (US$7.14 billion). His picture made the front page of newspapers around the world, and journalists staked out his apartment and those of his family members for days, but they did not catch him on camera -- prompting rumors he had fled the country.
5) His lawyer maintained he was not on the run and would speak to investigators.
6) His motives remained a mystery, and the bank said it appeared that he did not gain personally from the unauthorized trades. Acquaintances described Kerviel as reserved and considerate, a young man who once taught kids judo and held the door for elderly neighbors.
7) The debacle -- which has rattled an already nervous banking sector and appeared to be the biggest-ever trading fraud by one person -- has fueled a debate about risk management, with France's conservative president condemning speculation.
8) "If we can make profits in a matter of hours, we can also have huge losses," said President Nicolas Sarkozy during a visit to India. "We must stop with this system that has gone haywire and that has lost track of its aim."
9) "It appears to be time to ... inject a bit of common sense into all these systems," he added.
10) French officials have said that Kerviel, a relatively inexperienced trader, was dealing with more than euro50 billion ($73.31 billion). That is more than the bank's market capitalization of euro35.9 billion (US$52.6 billion), and is close to the annual GDP of countries such as Slovakia, Qatar or Libya.
11) Kerviel had been investing the bank's money by hedging on European equity market indices, meaning he bet on how the markets would perform at a future date.
12) Societe Generale said it discovered the fraud last weekend and unwound the trader's losing bets starting Monday, when world markets tumbled.
13) Some experts have suggested Societe Generale may have exacerbated the fall and indirectly led to the U.S. Federal Reserve's subsequent decision to cut rates.
14) In an interview published Saturday, Societe Generale's chief executive, Daniel Bouton, dismissed the notion that the bank's actions helped fuel the turmoil on world markets.
15) "It's absurd!" Bouton told Le Figaro daily in an interview published Saturday. "Anyone could calculate our contribution to the market in recent days."
16) Bouton said Kerviel had been betting throughout 2007 that markets would fall -- a winning position. But the trader had overstepped his authority and was wagering much more money than he should have, Bouton said.
17) So at the beginning of January, Bouton said, the trader voluntarily created losing positions, to neutralize his earlier gains and cover his tracks.
18) But this month's quickly dropping markets turned "this sad affair ... into a Greek tragedy: His virtual losing position became huge," Bouton was quoted as saying.
19) Despite the bank's losses, which Bouton called "enormous and abnormal," he insisted Societe Generale's viability was not at risk.
20) French Finance Minister Christine Lagarde, speaking Saturday at the World Economic Forum in Davos, Switzerland, said she has been asked to compile a report on the fraud, Dow Jones Newswires reported.
21) Lagarde said her report will look at "the reality of facts based on real hard data," and "how and why" the bank's security controls failed to prevent the fraud.
22) Experts and others, including France's prime minister, have questioned whether a single futures trader could have managed such large sums. Some have suggested Societe Generale might have used Kerviel as a scapegoat for other losses, like those related to the subprime crisis.
23) The bank says the scale of the damage was so great only because of the bad timing of the discovery -- right before the worst day in world markets since Sept. 11, 2001. It also fired Kerviel's supervisors.
24) In Thursday's statement, the company also announced another euro2.05 billion (US$2.99 billion) subprime-related loss and said it planned to raise euro5.5 billion (US$8.02 billion) in new capital.
25) Societe Generale's shares have lost nearly half their value over the past six months. After an up-and-down day Friday, the shares closed down 2.5 percent at euro73.87 (US$108.62).
French police question trader implicated in massive fraud at Societe Generale bank
(APW_ENG_20080126.0874)
1) The French trader accused of one of the biggest bank frauds ever surfaced Saturday -- in the custody of police, who were questioning him about bad bets that cost France's No. 2 bank billions of euros in a season of jittery markets.
2) Financial police in Paris were questioning Jerome Kerviel in a probe into Societe Generale's allegation against the 31-year-old trader, judicial officials said. They were speaking on condition of anonymity because the investigation is continuing.
3) Under French law, he can be held up to 48 hours.
4) Jean-Michel Aldebert, head of Paris' financial police said Kerviel gave himself up of his own free will.
5) He "is very well, he's collaborating," Aldebert told journalists Friday evening.
6) Kerviel has kept a low profile since the bank said Thursday that Kerviel's unauthorized trades caused it losses of euro4.9 billion (US$7.14 billion). His picture made the front page of newspapers around the world, and journalists staked out his apartment and those of his family members for days, but they did not catch him on camera -- prompting rumors he had fled the country.
7) His lawyer maintained he was not on the run and would speak to investigators.
8) His motives remained a mystery, and the bank said it appeared that he did not gain personally from the unauthorized trades. Acquaintances described Kerviel as reserved and considerate, a young man who once taught kids judo and held the door for elderly neighbors.
9) The debacle -- which has rattled an already nervous banking sector and appeared to be the biggest-ever trading fraud by one person -- has fueled a debate about risk management, with France's conservative president condemning speculation.
10) "If we can make profits in a matter of hours, we can also have huge losses," said President Nicolas Sarkozy during a visit to India. "We must stop with this system that has gone haywire and that has lost track of its aim."
11) "It appears to be time to ... inject a bit of common sense into all these systems," he added.
12) French officials have said that Kerviel, a relatively inexperienced trader, was dealing with more than euro50 billion ($73.31 billion). That is more than the bank's market capitalization of euro35.9 billion (US$52.6 billion), and is close to the annual GDP of countries such as Slovakia, Qatar or Libya.
13) Kerviel had been investing the bank's money by hedging on European equity market indices, meaning he bet on how the markets would perform at a future date.
14) Societe Generale said it discovered the fraud last weekend and unwound the trader's losing bets starting Monday, when world markets tumbled.
15) Some experts have suggested Societe Generale may have exacerbated the fall and indirectly led to the U.S. Federal Reserve's subsequent decision to cut rates.
16) In an interview published Saturday, Societe Generale's chief executive, Daniel Bouton, dismissed the notion that the bank's actions helped fuel the turmoil on world markets.
17) "It's absurd!" Bouton told Le Figaro daily in an interview published Saturday. "Anyone could calculate our contribution to the market in recent days."
18) Bouton said Kerviel had been betting throughout 2007 that markets would fall -- a winning position. But the trader had overstepped his authority and was wagering much more money than he should have, Bouton said.
19) So at the beginning of January, Bouton said, the trader voluntarily created losing positions, to neutralize his earlier gains and cover his tracks.
20) But this month's quickly dropping markets turned "this sad affair ... into a Greek tragedy: His virtual losing position became huge," Bouton was quoted as saying.
21) Despite the bank's losses, which Bouton called "enormous and abnormal," he insisted Societe Generale's viability was not at risk.
22) French Finance Minister Christine Lagarde, speaking Saturday at the World Economic Forum in Davos, Switzerland, said she has been asked to compile a report on the fraud, Dow Jones Newswires reported.
23) Lagarde said her report will look at "the reality of facts based on real hard data," and "how and why" the bank's security controls failed to prevent the fraud.
24) Experts and others, including France's prime minister, have questioned whether a single futures trader could have managed such large sums. Some have suggested Societe Generale might have used Kerviel as a scapegoat for other losses, like those related to the subprime crisis.
25) The bank says the scale of the damage was so great only because of the bad timing of the discovery -- right before the worst day in world markets since Sept. 11, 2001. It also fired Kerviel's supervisors.
26) In Thursday's statement, the company also announced another euro2.05 billion (US$2.99 billion) subprime-related loss and said it planned to raise euro5.5 billion (US$8.02 billion) in new capital.
27) Societe Generale's shares have lost nearly half their value over the past six months. After an up-and-down day Friday, the shares closed down 2.5 percent at euro73.87 (US$108.62).
2008-01-27
French police question trader implicated in massive fraud at Societe Generale bank
(APW_ENG_20080127.0051)
1) The French trader accused of one of the biggest bank frauds was taken into custody by police, who were questioning him about bad bets that cost France's No. 2 bank billions of euros in a season of jittery markets.
2) Financial police in Paris were questioning Jerome Kerviel Saturday in a probe into Societe Generale's allegation against the 31-year-old trader, judicial officials said. They were speaking on condition of anonymity because the investigation is continuing.
3) Under French law, he can be held up to 48 hours.
4) Jean-Michel Aldebert, head of Paris' financial police said Kerviel gave himself up of his own free will.
5) He "is very well, he's collaborating," Aldebert told journalists Friday evening.
6) Kerviel has kept a low profile since the bank said Thursday that Kerviel's unauthorized trades caused it losses of euro4.9 billion (US$7.14 billion). His picture made the front page of newspapers around the world, and journalists staked out his apartment and those of his family members for days, but they did not catch him on camera -- prompting rumors he had fled the country.
7) His lawyer maintained he was not on the run and would speak to investigators.
8) His motives remained a mystery, and the bank said it appeared that he did not gain personally from the unauthorized trades. Acquaintances described Kerviel as reserved and considerate, a young man who once taught kids judo and held the door for elderly neighbors.
9) The debacle -- which has rattled an already nervous banking sector and appeared to be the biggest-ever trading fraud by one person -- has fueled a debate about risk management, with France's conservative president condemning speculation.
10) "If we can make profits in a matter of hours, we can also have huge losses," said President Nicolas Sarkozy during a visit to India. "We must stop with this system that has gone haywire and that has lost track of its aim."
11) "It appears to be time to ... inject a bit of common sense into all these systems," he added.
12) French officials have said that Kerviel, a relatively inexperienced trader, was dealing with more than euro50 billion ($73.31 billion). That is more than the bank's market capitalization of euro35.9 billion (US$52.6 billion), and is close to the annual GDP of countries such as Slovakia, Qatar or Libya.
13) Kerviel had been investing the bank's money by hedging on European equity market indices, meaning he bet on how the markets would perform at a future date.
14) Societe Generale said it discovered the fraud last weekend and unwound the trader's losing bets starting Monday, when world markets tumbled.
15) Some experts have suggested Societe Generale may have exacerbated the fall and indirectly led to the U.S. Federal Reserve's subsequent decision to cut rates.
16) In an interview published Saturday, Societe Generale's chief executive, Daniel Bouton, dismissed the notion that the bank's actions helped fuel the turmoil on world markets.
17) "It's absurd!" Bouton told Le Figaro daily in an interview published Saturday. "Anyone could calculate our contribution to the market in recent days."
18) Bouton said Kerviel had been betting throughout 2007 that markets would fall -- a winning position. But the trader had overstepped his authority and was wagering much more money than he should have, Bouton said.
19) So at the beginning of January, Bouton said, the trader voluntarily created losing positions, to neutralize his earlier gains and cover his tracks.
20) But this month's quickly dropping markets turned "this sad affair ... into a Greek tragedy: His virtual losing position became huge," Bouton was quoted as saying.
21) Despite the bank's losses, which Bouton called "enormous and abnormal," he insisted Societe Generale's viability was not at risk.
22) French Finance Minister Christine Lagarde, speaking Saturday at the World Economic Forum in Davos, Switzerland, said she has been asked to compile a report on the fraud, Dow Jones Newswires reported.
23) Lagarde said her report will look at "the reality of facts based on real hard data," and "how and why" the bank's security controls failed to prevent the fraud.
24) Experts and others, including France's prime minister, have questioned whether a single futures trader could have managed such large sums. Some have suggested Societe Generale might have used Kerviel as a scapegoat for other losses, like those related to the subprime crisis.
25) The bank says the scale of the damage was so great only because of the bad timing of the discovery -- right before the worst day in world markets since Sept. 11, 2001. It also fired Kerviel's supervisors.
26) In Thursday's statement, the company also announced another euro2.05 billion (US$2.99 billion) subprime-related loss and said it planned to raise euro5.5 billion (US$8.02 billion) in new capital.
27) Societe Generale's shares have lost nearly half their value over the past six months. After an up-and-down day Friday, the shares closed down 2.5 percent at euro73.87 (US$108.62).
French police question trader implicated in massive fraud at Societe Generale bank
(APW_ENG_20080127.0291)
1) The French trader accused of massive bank fraud is cooperating with police, who were expected to hold him for a second day of questioning on Sunday, officials said.
2) "He's feeling fine, he's collaborating and ready to explain himself," Jean-Michel Aldebert, of the Paris prosecutors' office, said Saturday evening.
3) He said Jerome Kerviel, 31, gave himself up of his own free will. He was taken into custody on Saturday afternoon. Police were questioning him about allegedly fraudulent trades that France's No. 2 bank, Societe Generale, says cost it billions of euros in jittery markets.
4) A judicial official said Kerviel most likely would be kept in custody until Monday, when he could be presented to a judge and face preliminary charges.
5) Kerviel had not been seen in public since the bank said Thursday that his unauthorized trades lost it euro4.9 billion (US$7.14 billion).
6) His motives remained a mystery, and the bank said it appeared that he did not gain personally from the unauthorized trades. Acquaintances described Kerviel as reserved and considerate, a young man who once taught children judo and held the door for elderly neighbors.
7) The debacle -- which has rattled an already nervous banking sector and appeared to be the biggest-ever trading fraud by one person -- has fueled a debate about risk management, with France's conservative president condemning speculation.
8) "If we can make profits in a matter of hours, we can also have huge losses," said President Nicolas Sarkozy during a visit to India. "We must stop with this system that has gone haywire and that has lost track of its aim."
9) "It appears to be time to ... inject a bit of common sense into all these systems," he added.
10) French officials have said that Kerviel, a relatively inexperienced trader, was dealing with more than euro50 billion (US$73 billion). That is more than the bank's market capitalization of euro35.9 billion (US$52.6 billion), and is close to the annual GDP of countries such as Slovakia, Qatar or Libya.
11) Kerviel had been investing the bank's money by hedging on European equity market indices, meaning he bet on how the markets would perform at a future date.
12) Societe Generale said it discovered the fraud last weekend and unwound the trader's losing bets starting Monday, when world markets tumbled.
13) Some experts have suggested Societe Generale may have exacerbated the fall and indirectly led to the U.S. Federal Reserve's subsequent decision to cut rates.
14) In an interview published Saturday, Societe Generale's chief executive, Daniel Bouton, dismissed as "absurd" the notion that the bank's actions helped fuel the turmoil on world markets.
15) Bouton said Kerviel had been betting throughout 2007 that markets would fall -- a winning position. But the trader had overstepped his authority and was wagering much more money than he should have, Bouton said.
16) So at the beginning of January, Bouton said, the trader voluntarily created losing positions, to neutralize his earlier gains and cover his tracks.
17) But this month's quickly dropping markets turned "this sad affair ... into a Greek tragedy: His virtual losing position became huge," Bouton was quoted by Le Figaro as saying.
18) Despite the bank's losses, which Bouton called "enormous and abnormal," he insisted Societe Generale's viability was not at risk.
19) Experts and others, including France's prime minister, have questioned whether a single futures trader could have managed such large sums. Some have suggested Societe Generale might have used Kerviel as a scapegoat for other losses, like those related to the subprime crisis.
20) The bank says the scale of the damage was so great only because of the bad timing of the discovery -- right before the worst day in world markets since Sept. 11, 2001. It also fired Kerviel's supervisors.
Trader taken in for questioning in fraud probe to be held for up to 24 more hours
(APW_ENG_20080127.0459)
1) A trader held for questioning in a multibillion-euro (-dollar) banking fraud probe is to be kept in custody for up to a further 24 hours, French judicial officials said Sunday.
2) Jerome Kerviel, blamed by French bank Societe Generale for a fraud the bank said cost it euro4.9 billion (US$7.14 billion), can be held until Monday afternoon, said judicial officials, speaking on condition of anonymity because the investigation is continuing. Kerviel, 31, was taken into custody on Saturday.
Trader taken in for questioning in fraud probe to be held for up to 24 more hours
(APW_ENG_20080127.0477)
1) A trader held for questioning in a multibillion-euro (-dollar) banking fraud probe is to be kept in custody for up to a further 24 hours, French judicial officials said Sunday.
2) Jerome Kerviel, blamed by French bank Societe Generale for a fraud the bank said cost it euro4.9 billion (US$7.14 billion), can be held until Monday afternoon, said judicial officials, speaking on condition of anonymity because the investigation is continuing. Kerviel, 31, was taken into custody on Saturday.
3) Under French law, after 48 hours in custody, he must either be released or handed preliminary charges. Kerviel was taken into custody on Saturday.
4) Jean-Michel Aldebert, of the Paris prosecutors' office, told reporters Saturday that the 31-year-old trader gave himself up of his own free will.
5) Kerviel had not been seen in public since the bank announced his unauthorized trades in a statement on Thursday.
6) His motives remained a mystery, and the bank said it appeared that he did not gain personally from the trades. Acquaintances described Kerviel as reserved and considerate, a young man who once taught children judo and held the door for elderly neighbors.
7) French officials have said that Kerviel, a relatively inexperienced trader, was dealing with more than euro50 billion (US$73 billion). That is more than the bank's market capitalization of euro35.9 billion (US$52.6 billion), and is close to the annual GDP of countries such as Slovakia, Qatar or Libya.
8) Kerviel had been investing the bank's money by hedging on European equity market indices, meaning he bet on how the markets would perform at a future date.
9) Germany's Der Spiegel newsmagazine cited unnamed traders as saying Kerviel made a huge gamble on Germany's DAX stock exchange, buying some 140,000 DAX futures. When the exchange dropped, Kerviel racked up losses that amounted by mid-January to around euro2 billion (US$3 billion), said the report, posted on Der Spiegel's web site.
10) Societe Generale said it discovered the fraud last weekend and unwound the trader's losing bets starting Monday, when world markets tumbled.
11) Some experts have suggested Societe Generale may have exacerbated the fall and indirectly led to the U.S. Federal Reserve's subsequent decision to cut rates.
12) In an interview published Saturday, Societe Generale's chief executive, Daniel Bouton, dismissed as "absurd" the notion that the bank's actions helped fuel the turmoil on world markets.
13) Bouton said Kerviel had been betting throughout 2007 that markets would fall -- a winning position. But the trader had overstepped his authority and was wagering much more money than he should have, Bouton said.
14) So at the beginning of January, Bouton said, the trader voluntarily created losing positions, to neutralize his earlier gains and cover his tracks.
15) But this month's quickly dropping markets turned "this sad affair ... into a Greek tragedy: His virtual losing position became huge," Bouton was quoted by Le Figaro as saying.
16) Despite the bank's losses, which Bouton called "enormous and abnormal," he insisted Societe Generale's viability was not at risk.
17) Experts and others, including France's prime minister, have questioned whether a single futures trader could have managed such large sums. Some have suggested Societe Generale might have used Kerviel as a scapegoat for other losses, like those related to the subprime crisis.
18) The bank says the scale of the damage was so great only because of the bad timing of the discovery -- right before the worst day in world markets since Sept. 11, 2001. It also fired Kerviel's supervisors.
Societe Generale says trader used multiple fraud techniques
(APW_ENG_20080127.0512)
1) Societe Generale detailed Sunday how a young trader allegedly lost the bank billions, saying he hacked computers and used "several fraudulent methods" to skirt controls.
2) In a five-page document, the bank also sought to counter the notion that it had disrupted markets by unwinding the massive positions built up by the trader. The bank took three days last week to sell off the contracts on the Eurostoxx, DAX and FTSE indices, but said that it had done so in a "controlled" way.
3) The trader, Jerome Kerviel, 31, was being questioned Sunday for a second day by police.
4) Societe Generale said Kerviel misappropriated other people's computer access codes, falsified documents and employed other methods to cover his tracks -- helped by his previous experience working in offices that monitor traders.
5) "He had a very good understanding of all of Societe Generale's processing and control procedures," the statement said.
6) The bank said Kerviel had built up a position worth some euro50 billion (US$73.5 billion) -- which was eventually closed or hedged by last Wednesday with a loss of euro4.9 billion (US$7.21 billion).
7) "The position was unwound over three days in a controlled fashion," it said.
Societe Generale says trader used multiple fraud techniques
(APW_ENG_20080127.0643)
1) Societe Generale detailed Sunday how a trader evaded all its controls to bet some euro50 billion (US$73.5 billion) -- more than the French bank's market worth -- on European markets, saying he hacked computers and used other "fraudulent methods" to cover his tracks, causing billions in losses.
2) The bank says the trader, Jerome Kerviel, did not appear to have profited personally from the transactions and seemingly worked alone -- a version reiterated Sunday by Jean-Pierre Mustier, chief executive of the bank's corporate and investment banking arm.
3) But, in a conference call with reporters, Mustier added: "I cannot guarantee to you 100 percent that there was no complicity."
4) Officials have said Kerviel is cooperating with police, who were expected to hold him for a second day of questioning on Sunday.
5) "He's feeling fine, he's collaborating and ready to explain himself," Jean-Michel Aldebert, of the Paris prosecutors' office, said Saturday evening.
6) He said Kerviel, 31, gave himself up voluntarily. He was taken into custody Saturday afternoon. Police were questioning him about allegedly fraudulent trades that Societe Generale, France's second-largest bank, says cost it billions of euros in jittery markets.
7) A judicial official said Kerviel most likely would be kept in custody until Monday, when he could be presented to a judge and face preliminary charges.
8) Kerviel has not been seen in public since the bank said Thursday that his unauthorized trades lost it euro4.9 billion (US$7.14 billion).
9) In a five-page document, Societe Generale sought to counter the notion that it had disrupted markets by hurriedly selling off the massive positions that Kerviel built up, allegedly without authorization.
10) The bank took three days last week to sell off the contracts on the Eurostoxx, DAX and FTSE indices, but said Sunday it had done so in a "controlled" way.
11) Societe Generale said Kerviel misappropriated other people's computer access codes, falsified documents and employed other methods to cover his tracks -- helped by his previous years of experience when he worked in other offices at the bank that monitor traders.
12) The bank said Kerviel built up two portfolios of investments -- but that one of them consisted of "fictional operations," leaving the bank hugely exposed.
13) "In order to ensure that these fictitious operations were not immediately identified, the trader used his years of experience in processing and controlling market operations to successively circumvent all the controls which allow the bank to check the characteristics of the operations carried out by its traders," the statement said.
14) "He had a very good understanding of all of Societe Generale's processing and control procedures."
15) It was the most detailed explanation so far by the bank of the debacle that has further rattled the banking industry, already reeling from the subprime mortgage crisis in the United States.
16) It has prompted calls for tighter regulation -- 13 years after trader Nick Leeson, whose illegal speculation bankrupted British bank Barings, first highlighted the potential risks from rogue traders operating without proper oversight.
17) The bank said Kerviel had built up a position worth euro50 billion (US$73.5 billion) -- far more than the bank's market capitalization of euro35.9 billion (US$52.6 billion), and close to the annual GDP of countries such as Slovakia, Qatar or Libya.
18) The debacle -- which has rattled an already nervous banking sector and appeared to be the biggest-ever trading fraud by one person -- has fueled a debate about risk management, with France's conservative president condemning speculation.
19) "If we can make profits in a matter of hours, we can also have huge losses," said President Nicolas Sarkozy during a visit to India. "We must stop with this system that has gone haywire and that has lost track of its aim."
20) "It appears to be time to ... inject a bit of common sense into all these systems," he added.
21) Kerviel had been investing the bank's money by hedging on European equity market indices, meaning he bet on how the markets would perform at a future date.
22) Experts and others, including France's prime minister, have questioned whether a single futures trader could have managed such large sums. Some have suggested Societe Generale might have used Kerviel as a scapegoat for other losses, like those related to the subprime crisis.
Prosecutor in French bank fraud case calls questioning of trader ' fruitful '
(APW_ENG_20080127.0664)
1) The head of the financial section of the Paris prosecutor's office said Sunday the questioning of a trader implicated in a massive bank fraud case was proving "extremely fruitful"
2) Jean-Michel Aldebert said the questioning of trader Jerome Kerviel was "going very well and the investigation led by the specialists of the financial police is extremely fruitful," he said. Kerviel, who was taken in for questioning on Saturday, can be kept in custody until Monday afternoon.
Societe Generale says trader used multiple fraud techniques
(APW_ENG_20080127.0698)
1) Societe Generale detailed Sunday how a trader evaded all its controls to bet some euro50 billion (US$73.5 billion) -- more than the French bank's market worth -- on European markets, saying he hacked computers and used other "fraudulent methods" to cover his tracks, causing billions in losses.
2) The bank says the trader, Jerome Kerviel, did not appear to have profited personally from the transactions and seemingly worked alone -- a version reiterated Sunday by Jean-Pierre Mustier, chief executive of the bank's corporate and investment banking arm.
3) But, in a conference call with reporters, Mustier added: "I cannot guarantee to you 100 percent that there was no complicity."
4) Officials said Kerviel was cooperating with police, who held him for a second day of questioning Sunday, seeking answers to what, if confirmed, would be the biggest-ever trading fraud by a single person.
5) The questioning was "going very well and the investigation led by the specialists of the financial police is extremely fruitful," said Jean-Michel Aldebert, head of the financial section of the Paris prosecutor's office.
6) He said Kerviel, 31, gave himself up voluntarily and was taken into custody Saturday afternoon. Kerviel has not been seen in public since the bank said Thursday that his unauthorized trades lost it euro4.9 billion (US$7.14 billion).
7) Societe Generale sought Sunday to counter the notion that it had disrupted markets by hurriedly selling off the massive positions that Kerviel allegedly built up -- with euro30 billion ($44.12 billion) on the Eurostoxx index, another euro18 billion ($26.47 billion) on DAX futures and euro2 billion on FTSE futures.
8) The combined value of those positions, euro50 billion (US$73.5 billion), is far more than the bank's market capitalization of euro35.9 billion (US$52.6 billion), and close to the annual GDP of countries such as Slovakia, Qatar or Libya.
9) The bank took three days last week to sell off the contracts but insisted Sunday it had done so in a "controlled" way. Some experts have wondered whether the bank's selling further drove down markets that were already falling.
10) "Our impact on the market was quite minimal," said Mustier.
11) Societe Generale said Kerviel misappropriated other people's computer access codes, falsified documents and employed other methods to cover his tracks -- helped by his previous years of experience when he worked in other offices at the bank that monitor traders.
12) Mustier said Kerviel's motivations were still unclear. "We don't know, we don't understand" what drove him to do it, he said.
13) "This event is a massive shock for us," he said.
14) The bank said Kerviel built up two portfolios of investments -- but that one of them consisted of "fictional operations," leaving the bank hugely exposed.
15) "In order to ensure that these fictitious operations were not immediately identified, the trader used his years of experience in processing and controlling market operations to successively circumvent all the controls which allow the bank to check the characteristics of the operations carried out by its traders," the bank said in a five-page statement.
16) "He had a very good understanding of all of Societe Generale's processing and control procedures."
17) It was the bank's most detailed explanation yet of the debacle that has further rattled the banking industry, already reeling from the subprime mortgage crisis in the United States.
18) It has prompted calls for tighter regulation -- 13 years after trader Nick Leeson, whose illegal speculation bankrupted British bank Barings, first highlighted the potential risks from rogue traders operating without proper oversight.
19) Experts and others, including France's prime minister, have questioned whether a single futures trader could have managed such large sums. Some have suggested Societe Generale might have used Kerviel as a scapegoat for other losses, like those related to the subprime crisis.
Societe Generale says trader used multiple fraud techniques
(APW_ENG_20080127.0785)
1) Societe Generale detailed Sunday how a trader evaded all its controls to bet euro50 billion (US$73.5 billion) -- more than the French bank's market worth -- on European markets, saying he hacked computers and "combined several fraudulent methods" to cover his tracks, causing billions in losses.
2) The bank says the trader, Jerome Kerviel, did not appear to have profited personally from the transactions and seemingly worked alone -- a version reiterated Sunday by Jean-Pierre Mustier, chief executive of the bank's corporate and investment banking arm.
3) But, in a conference call with reporters, Mustier added: "I cannot guarantee to you 100 percent that there was no complicity."
4) Officials said Kerviel was cooperating with police, who held him for a second day of questioning Sunday, seeking answers to what, if confirmed, would be the biggest-ever trading fraud by a single person.
5) The questioning was "going very well and the investigation led by the specialists of the financial police is extremely fruitful," said Jean-Michel Aldebert, head of the financial section of the Paris prosecutor's office.
6) Kerviel was giving "very interesting" explanations, Aldebert added. "From what he told me, he was fine psychologically." He refused to say whether Kerviel might face preliminary charges.
7) Kerviel, 31, was taken into custody Saturday afternoon. He has not been seen in public since the bank's bombshell revelation Thursday that his unauthorized trades lost it euro4.9 billion (US$7.14 billion).
8) Even before his allegedly massive fraud came to light, Kerviel had apparently triggered occasional alarms at Societe Generale -- France's second-largest bank -- with his trading, but not to a degree that led managers to investigate further.
9) "Our controls basically identified from time to time problems with this trader's portfolio," said Mustier.
10) But Kerviel explained away the red flags as trading mistakes, added Mustier.
11) "The trade was canceled, there was no specific follow-up to do," he said. "From our understanding today, the number of mistakes was not higher than (for) any other trader, so from our understanding that was not a reason to ring a bell."
12) In a five-page statement Sunday, the bank said Kerviel used its money to build massive positions in futures contracts tied to the performance of baskets of stocks traded on exchanges in London, Paris, Frankfurt and other European markets.
13) Since those bets greatly exceeded the amount of capital he was allowed to put at risk, Kerviel entered fictitious and offsetting trades in Societe Generale's computer system that appeared to minimize the odds of big losses, the bank said. The trades were purposely chosen to avoid detection because they did not require cash contributions or be subject to margin calls, which would require putting up more money if the fictitious bet soured, it said.
14) The bank said he plowed euro30 billion ($44.12 billion) into the Eurostoxx index, another euro18 billion ($26.47 billion) on the DAX in Germany and euro2 billion on the FTSE in London. The combined value of those positions, euro50 billion (US$73.5 billion), is far more than the bank's market capitalization of euro35.9 billion (US$52.6 billion), and close to the annual GDP of countries such as Slovakia, Qatar or Libya.
15) Societe Generale took three days last week to sell or offset with hedges his contracts that amounted to bets on whether market indexes would rise or fall. But the bank sought Sunday to counter suggestions that its sell-off had caused already falling markets to plummet further than they otherwise might have done. The bank said it unwound Kerviel's positions in "a controlled fashion."
16) "Our impact on the market was quite minimal," said Mustier.
17) Societe Generale said Kerviel misappropriated other people's computer access codes, falsified documents and employed other methods to cover his tracks -- helped by his previous years of experience when he worked in other offices at the bank that monitor traders. Acquaintances described Kerviel as reserved and considerate, a young man who once taught children judo and held the door for elderly neighbors.
18) Kerviel's downfall started in the days before Friday, Feb. 18, when Societe Generale tightened lending restrictions on one of its customers, an unnamed large bank. He had apparently used that bank's name for one or more of his fictitious trades, and it led to what Societe Generale described as having "additional controls" put in place.
19) Kerviel's superiors in Societe Generale's equity trading division reviewed that day an e-mail from the large bank supposedly confirming trades he had booked. But they were suspicious about where the e-mail came from and launched an emergency investigation.
20) A day later on Saturday Kerviel was called to Societe Generale to explain; in the meantime bank investigators confirmed that the large bank did not know about the trades.
21) After first not providing a clear explanation, Kerviel eventually confirmed that he had entered fictitious trades, the bank said. It then took a bank team throughout the night and into Sunday the 20th to identify all the exposure. Societe Generale's chief executive, Daniel Bouton, notified the governor of the Bank of France that day, and a decision was made to unwind the trades as quickly and as quietly as possible.
22) A complicating factor was that the bank was finishing work that Sunday on details of a separate announcement about the size of the multi-billion-dollar charge it would take for bad bets on mortgage-related investments in the United States. News of that misstep was delayed.
23) Societe Generale traders began unwinding Kerviel's losing bets at the beginning of European trading on Monday, just as Asian markets were in a free-fall and European shares were poised to plummet after a big drop in U.S. markets on the previous Friday. It took until Wednesday to finally close the books on Kerviel's adventures, the bank said.
24) Some experts have suggested Societe Generale may have exacerbated the fall and indirectly led to the U.S. Federal Reserve's subsequent decision to cut rates.
25) But in its explanatory note released on Sunday, the bank defended itself by saying the trades represented no more than 8.1 percent of the volume in futures trading each day on the Eurostoxx, DAX and FTSE.
26) Mustier said Kerviel's motivations were still unclear. "We don't know, we don't understand" what drove him to do it, he said.
27) "This event is a massive shock for us," he said.
28) The bank said Kerviel built up two portfolios of investments -- but that one of them consisted of "fictional operations," leaving the bank hugely exposed.
29) "In order to ensure that these fictitious operations were not immediately identified, the trader used his years of experience in processing and controlling market operations to successively circumvent all the controls which allow the bank to check the characteristics of the operations carried out by its traders," said the bank's statement.
30) "He had a very good understanding of all of Societe Generale's processing and control procedures."
31) It was the bank's most detailed explanation yet of the debacle that has further rattled the banking industry, already reeling from the subprime mortgage crisis in the United States.
32) It has prompted calls for tighter regulation -- 13 years after trader Nick Leeson, whose illegal speculation bankrupted British bank Barings, first highlighted the potential risks from rogue traders operating without proper oversight.
Societe Generale says trader used multiple fraud techniques
(APW_ENG_20080127.0802)
1) Societe Generale detailed Sunday how a trader evaded all its controls to bet euro50 billion (US$73.5 billion) -- more than the French bank's market worth -- on European markets, saying he hacked computers and "combined several fraudulent methods" to cover his tracks, causing billions in losses.
2) The bank says the trader, Jerome Kerviel, did not appear to have profited personally from the transactions and seemingly worked alone -- a version reiterated Sunday by Jean-Pierre Mustier, chief executive of the bank's corporate and investment banking arm.
3) But, in a conference call with reporters, Mustier added: "I cannot guarantee to you 100 percent that there was no complicity."
4) Officials said Kerviel was cooperating with police, who held him for a second day of questioning Sunday, seeking answers to what, if confirmed, would be the biggest-ever trading fraud by a single person.
5) The questioning was "going very well and the investigation led by the specialists of the financial police is extremely fruitful," said Jean-Michel Aldebert, head of the financial section of the Paris prosecutor's office.
6) Kerviel was giving "very interesting" explanations, Aldebert added. "From what he told me, he was fine psychologically." He refused to say whether Kerviel might face preliminary charges.
7) Kerviel, 31, was taken into custody Saturday afternoon. He has not been seen in public since the bank's bombshell revelation Thursday that his unauthorized trades lost it euro4.9 billion (US$7.14 billion).
8) Even before his allegedly massive fraud came to light, Kerviel had apparently triggered occasional alarms at Societe Generale -- France's second-largest bank -- with his trading, but not to a degree that led managers to investigate further.
9) "Our controls basically identified from time to time problems with this trader's portfolio," said Mustier.
10) But Kerviel explained away the red flags as trading mistakes, added Mustier.
11) "The trade was canceled, there was no specific follow-up to do," he said. "From our understanding today, the number of mistakes was not higher than (for) any other trader, so from our understanding that was not a reason to ring a bell."
12) In a five-page statement Sunday, the bank said Kerviel used its money to build massive positions in futures contracts tied to the performance of baskets of stocks traded on exchanges in London, Paris, Frankfurt and other European markets.
13) Since those bets greatly exceeded the amount of capital he was allowed to put at risk, Kerviel entered fictitious and offsetting trades in Societe Generale's computer system that appeared to minimize the odds of big losses, the bank said. The trades were purposely chosen to avoid detection because they did not require cash contributions or be subject to margin calls, which would require putting up more money if the fictitious bet soured, it said.
14) The bank said he plowed euro30 billion ($44.12 billion) into the Eurostoxx index, another euro18 billion ($26.47 billion) on the DAX in Germany and euro2 billion on the FTSE in London. The combined value of those positions, euro50 billion (US$73.5 billion), is far more than the bank's market capitalization of euro35.9 billion (US$52.6 billion), and close to the annual GDP of countries such as Slovakia, Qatar or Libya.
15) Societe Generale took three days last week to sell or offset with hedges his contracts that amounted to bets on whether market indexes would rise or fall. But the bank sought Sunday to counter suggestions that its sell-off had caused already falling markets to plummet further than they otherwise might have done. The bank said it unwound Kerviel's positions in "a controlled fashion."
16) "Our impact on the market was quite minimal," said Mustier.
17) Societe Generale said Kerviel misappropriated other people's computer access codes, falsified documents and employed other methods to cover his tracks -- helped by his previous years of experience when he worked in other offices at the bank that monitor traders. Acquaintances described Kerviel as reserved and considerate, a young man who once taught children judo and held the door for elderly neighbors.
18) Kerviel's downfall started in the days before Friday, Feb. 18, when Societe Generale tightened lending restrictions on one of its customers, an unnamed large bank. He had apparently used that bank's name for one or more of his fictitious trades, and it led to what Societe Generale described as having "additional controls" put in place.
19) Kerviel's superiors in Societe Generale's equity trading division reviewed that day an e-mail from the large bank supposedly confirming trades he had booked. But they were suspicious about where the e-mail came from and launched an emergency investigation.
20) A day later on Saturday Kerviel was called to Societe Generale to explain; in the meantime bank investigators confirmed that the large bank did not know about the trades.
21) After first not providing a clear explanation, Kerviel eventually confirmed that he had entered fictitious trades, the bank said. It then took a bank team throughout the night and into Sunday the 20th to identify all the exposure. Societe Generale's chief executive, Daniel Bouton, notified the governor of the Bank of France that day, and a decision was made to unwind the trades as quickly and as quietly as possible.
22) A complicating factor was that the bank was finishing work that Sunday on details of a separate announcement about the size of the multi-billion-dollar charge it would take for bad bets on mortgage-related investments in the United States. News of that misstep was delayed.
23) Societe Generale traders began unwinding Kerviel's losing bets at the beginning of European trading on Monday, just as Asian markets were in a free-fall and European shares were poised to plummet after a big drop in U.S. markets on the previous Friday. It took until Wednesday to finally close the books on Kerviel's adventures, the bank said.
24) Some experts have suggested Societe Generale may have exacerbated the fall and indirectly led to the U.S. Federal Reserve's subsequent decision to cut rates.
25) But in its explanatory note released on Sunday, the bank defended itself by saying the trades represented no more than 8.1 percent of the volume in futures trading each day on the Eurostoxx, DAX and FTSE.
26) Mustier said Kerviel's motivations were still unclear. "We don't know, we don't understand" what drove him to do it, he said.
27) "This event is a massive shock for us," he said.
28) The bank said Kerviel built up two portfolios of investments -- but that one of them consisted of "fictional operations," leaving the bank hugely exposed.
29) "In order to ensure that these fictitious operations were not immediately identified, the trader used his years of experience in processing and controlling market operations to successively circumvent all the controls which allow the bank to check the characteristics of the operations carried out by its traders," said the bank's statement.
30) "He had a very good understanding of all of Societe Generale's processing and control procedures."
31) It was the bank's most detailed explanation yet of the debacle that has further rattled the banking industry -- already reeling from the subprime mortgage crisis in the United States. Some observers have said the crisis could also leave the bank vulnerable to a takeover.
32) An aide to French President Nicolas Sarkozy suggested the state could step in to prevent any possible hostile bids.
33) "I think the state will not stand idly by if any predator attempts to take advantage of the situation," Henri Guaino told RTL radio on Sunday.
34) It has prompted calls for tighter regulation -- 13 years after trader Nick Leeson, whose illegal speculation bankrupted British bank Barings, first highlighted the potential risks from rogue traders operating without proper oversight.
Societe Generale says trader used multiple fraud techniques
(APW_ENG_20080127.0804)
1) Societe Generale detailed Sunday how a trader evaded all its controls to bet euro50 billion (US$73.5 billion) -- more than the French bank's market worth -- on European markets, saying he hacked computers and "combined several fraudulent methods" to cover his tracks, causing billions in losses.
2) The bank says the trader, Jerome Kerviel, did not appear to have profited personally from the transactions and seemingly worked alone -- a version reiterated Sunday by Jean-Pierre Mustier, chief executive of the bank's corporate and investment banking arm.
3) But, in a conference call with reporters, Mustier added: "I cannot guarantee to you 100 percent that there was no complicity."
4) Officials said Kerviel was cooperating with police, who held him for a second day of questioning Sunday, seeking answers to what, if confirmed, would be the biggest-ever trading fraud by a single person.
5) The questioning was "going very well and the investigation led by the specialists of the financial police is extremely fruitful," said Jean-Michel Aldebert, head of the financial section of the Paris prosecutor's office.
6) Kerviel was giving "very interesting" explanations, Aldebert added. "From what he told me, he was fine psychologically." He refused to say whether Kerviel might face preliminary charges.
7) Kerviel, 31, was taken into custody Saturday afternoon. He has not been seen in public since the bank's bombshell revelation Thursday that his unauthorized trades lost it euro4.9 billion (US$7.14 billion).
8) Even before his allegedly massive fraud came to light, Kerviel had apparently triggered occasional alarms at Societe Generale -- France's second-largest bank -- with his trading, but not to a degree that led managers to investigate further.
9) "Our controls basically identified from time to time problems with this trader's portfolio," said Mustier.
10) But Kerviel explained away the red flags as trading mistakes, added Mustier.
11) "The trade was canceled, there was no specific follow-up to do," he said. "From our understanding today, the number of mistakes was not higher than (for) any other trader, so from our understanding that was not a reason to ring a bell."
12) In a five-page statement Sunday, the bank said Kerviel used its money to build massive positions in futures contracts tied to the performance of baskets of stocks traded on exchanges in London, Paris, Frankfurt and other European markets.
13) Since those bets greatly exceeded the amount of capital he was allowed to put at risk, Kerviel entered fictitious and offsetting trades in Societe Generale's computer system that appeared to minimize the odds of big losses, the bank said. The trades were purposely chosen to avoid detection because they did not require cash contributions or be subject to margin calls, which would require putting up more money if the fictitious bet soured, it said.
14) The bank said he plowed euro30 billion ($44.12 billion) into the Eurostoxx index, another euro18 billion ($26.47 billion) on the DAX in Germany and euro2 billion on the FTSE in London. The combined value of those positions, euro50 billion (US$73.5 billion), is far more than the bank's market capitalization of euro35.9 billion (US$52.6 billion), and close to the annual GDP of countries such as Slovakia, Qatar or Libya.
15) Societe Generale took three days last week to sell or offset with hedges his contracts that amounted to bets on whether market indexes would rise or fall. But the bank sought Sunday to counter suggestions that its sell-off had caused already falling markets to plummet further than they otherwise might have done. The bank said it unwound Kerviel's positions in "a controlled fashion."
16) "Our impact on the market was quite minimal," said Mustier.
17) Societe Generale said Kerviel misappropriated other people's computer access codes, falsified documents and employed other methods to cover his tracks -- helped by his previous years of experience when he worked in other offices at the bank that monitor traders. Acquaintances described Kerviel as reserved and considerate, a young man who once taught children judo and held the door for elderly neighbors.
18) Kerviel's downfall started in the days before Friday, Jan. 18, when Societe Generale tightened lending restrictions on one of its customers, an unnamed large bank. He had apparently used that bank's name for one or more of his fictitious trades, and it led to what Societe Generale described as having "additional controls" put in place.
19) Kerviel's superiors in Societe Generale's equity trading division reviewed that day an e-mail from the large bank supposedly confirming trades he had booked. But they were suspicious about where the e-mail came from and launched an emergency investigation.
20) A day later on Saturday Kerviel was called to Societe Generale to explain; in the meantime bank investigators confirmed that the large bank did not know about the trades.
21) After first not providing a clear explanation, Kerviel eventually confirmed that he had entered fictitious trades, the bank said. It then took a bank team throughout the night and into Sunday the 20th to identify all the exposure. Societe Generale's chief executive, Daniel Bouton, notified the governor of the Bank of France that day, and a decision was made to unwind the trades as quickly and as quietly as possible.
22) A complicating factor was that the bank was finishing work that Sunday on details of a separate announcement about the size of the multi-billion-dollar charge it would take for bad bets on mortgage-related investments in the United States. News of that misstep was delayed.
23) Societe Generale traders began unwinding Kerviel's losing bets at the beginning of European trading on Monday, just as Asian markets were in a free-fall and European shares were poised to plummet after a big drop in U.S. markets on the previous Friday. It took until Wednesday to finally close the books on Kerviel's adventures, the bank said.
24) Some experts have suggested Societe Generale may have exacerbated the fall and indirectly led to the U.S. Federal Reserve's subsequent decision to cut rates.
25) But in its explanatory note released on Sunday, the bank defended itself by saying the trades represented no more than 8.1 percent of the volume in futures trading each day on the Eurostoxx, DAX and FTSE.
26) Mustier said Kerviel's motivations were still unclear. "We don't know, we don't understand" what drove him to do it, he said.
27) "This event is a massive shock for us," he said.
28) The bank said Kerviel built up two portfolios of investments -- but that one of them consisted of "fictional operations," leaving the bank hugely exposed.
29) "In order to ensure that these fictitious operations were not immediately identified, the trader used his years of experience in processing and controlling market operations to successively circumvent all the controls which allow the bank to check the characteristics of the operations carried out by its traders," said the bank's statement.
30) "He had a very good understanding of all of Societe Generale's processing and control procedures."
31) It was the bank's most detailed explanation yet of the debacle that has further rattled the banking industry -- already reeling from the subprime mortgage crisis in the United States. Some observers have said the crisis could also leave the bank vulnerable to a takeover.
32) An aide to French President Nicolas Sarkozy suggested the state could step in to prevent any possible hostile bids.
33) "I think the state will not stand idly by if any predator attempts to take advantage of the situation," Henri Guaino told RTL radio on Sunday.
34) It has prompted calls for tighter regulation -- 13 years after trader Nick Leeson, whose illegal speculation bankrupted British bank Barings, first highlighted the potential risks from rogue traders operating without proper oversight.
Lawyer for SocGen trader:
(APW_ENG_20080127.0848)
1) A lawyer for the trader accused by Societe Generale of fraudulent trades costing billions said Sunday that accusations of wrongdoing against his client were being used to hide bad U.S. mortgage investments by the bank.
2) "He didn't steal anything, take anything, he didn't take any profit for himself," the lawyer, Christian Charriere-Bournazel, told The Associated Press by telephone, speaking of his client, Jerome Kerviel. "The suspicion on Kerviel allows the considerable losses that the bank made on subprimes to be hidden," he added.
Lawyer for SocGen trader:
(APW_ENG_20080127.0868)
1) A lawyer for the trader accused by Societe Generale of fraudulent trades costing billions said Sunday that accusations of wrongdoing against his client were being used to hide bad U.S. mortgage investments by the bank.
2) "He didn't steal anything, take anything, he didn't take any profit for himself," the lawyer, Christian Charriere-Bournazel, told The Associated Press by telephone, speaking of his client, Jerome Kerviel. "The suspicion on Kerviel allows the considerable losses that the bank made on subprimes to be hidden," he added.
3) The lawyer said Kerviel had made money for France's second-largest bank through 2007 and he protested that the young trader had since been "thrown to the wolves of public opinion."
4) "He made profits for the bank until December 31. From January 1, he took risky positions like all traders," said the lawyer, who is also president of the Paris bar.
5) He cast suspicion on Societe Generale's decision to quickly and quietly unwind the massive positions over three days last week, saying it did so in "totally unusual conditions."
6) "This decision was driven by other motives," he claimed, without elaborating.
Societe Generale says trader used multiple fraud techniques
(APW_ENG_20080127.0876)
1) Societe Generale detailed Sunday how a trader evaded all its controls to bet euro50 billion (US$73.5 billion) -- more than the French bank's market worth -- on European markets, saying he hacked computers and "combined several fraudulent methods" to cover his tracks, causing billions in losses.
2) The bank says the trader, Jerome Kerviel, did not appear to have profited personally from the transactions and seemingly worked alone -- a version reiterated Sunday by Jean-Pierre Mustier, chief executive of the bank's corporate and investment banking arm.
3) But, in a conference call with reporters, Mustier added: "I cannot guarantee to you 100 percent that there was no complicity."
4) Officials said Kerviel was cooperating with police, who held him for a second day of questioning Sunday, seeking answers to what, if confirmed, would be the biggest-ever trading fraud by a single person.
5) The questioning was "going very well and the investigation led by the specialists of the financial police is extremely fruitful," said Jean-Michel Aldebert, head of the financial section of the Paris prosecutor's office.
6) Kerviel was giving "very interesting" explanations, Aldebert added. "From what he told me, he was fine psychologically." He refused to say whether Kerviel might face preliminary charges.
7) Kerviel, 31, was taken into custody Saturday afternoon. He has not been seen in public since the bank's bombshell revelation Thursday that his unauthorized trades lost it euro4.9 billion (US$7.14 billion).
8) One of his lawyers said Sunday that the accusations of wrongdoing against Kerviel were being used to hide bad U.S. mortgage investments by the bank.
9) "He didn't steal anything, take anything, he didn't take any profit for himself," the lawyer, Christian Charriere-Bournazel, told The Associated Press by telephone. "The suspicion on Kerviel allows the considerable losses that the bank made on subprimes to be hidden."
10) The lawyer said Kerviel had made money for the bank through 2007 and he protested that the young trader had since been "thrown to the wolves of public opinion."
11) "He made profits for the bank until December 31. From January 1, he took risky positions like all traders," said the lawyer, who is also president of the Paris bar.
12) Even before his allegedly massive fraud came to light, Kerviel had apparently triggered occasional alarms at Societe Generale -- France's second-largest bank -- with his trading, but not to a degree that led managers to investigate further.
13) "Our controls basically identified from time to time problems with this trader's portfolio," said Mustier.
14) But Kerviel explained away the red flags as trading mistakes, added Mustier.
15) "The trade was canceled, there was no specific follow-up to do," he said. "From our understanding today, the number of mistakes was not higher than (for) any other trader, so from our understanding that was not a reason to ring a bell."
16) In a five-page statement Sunday, the bank said Kerviel used its money to build massive positions in futures contracts tied to the performance of baskets of stocks traded on exchanges in London, Paris, Frankfurt and other European markets.
17) Since those bets greatly exceeded the amount of capital he was allowed to put at risk, Kerviel entered fictitious and offsetting trades in Societe Generale's computer system that appeared to minimize the odds of big losses, the bank said. The trades were purposely chosen to avoid detection because they did not require cash contributions or be subject to margin calls, which would require putting up more money if the fictitious bet soured, it said.
18) The bank said he plowed euro30 billion ($44.12 billion) into the Eurostoxx index, another euro18 billion ($26.47 billion) on the DAX in Germany and euro2 billion on the FTSE in London. The combined value of those positions, euro50 billion (US$73.5 billion), is far more than the bank's market capitalization of euro35.9 billion (US$52.6 billion), and close to the annual GDP of countries such as Slovakia, Qatar or Libya.
19) Societe Generale took three days last week to sell or offset with hedges his contracts that amounted to bets on whether market indexes would rise or fall. But the bank sought Sunday to counter suggestions that its sell-off had caused already falling markets to plummet further than they otherwise might have done. The bank said it unwound Kerviel's positions in "a controlled fashion."
20) "Our impact on the market was quite minimal," said Mustier.
21) Societe Generale said Kerviel misappropriated other people's computer access codes, falsified documents and employed other methods to cover his tracks -- helped by his previous years of experience when he worked in other offices at the bank that monitor traders. Acquaintances described Kerviel as reserved and considerate, a young man who once taught children judo and held the door for elderly neighbors.
22) Kerviel's downfall started in the days before Friday, Jan. 18, when Societe Generale tightened lending restrictions on one of its customers, an unnamed large bank. He had apparently used that bank's name for one or more of his fictitious trades, and it led to what Societe Generale described as having "additional controls" put in place.
23) Kerviel's superiors in Societe Generale's equity trading division reviewed that day an e-mail from the large bank supposedly confirming trades he had booked. But they were suspicious about where the e-mail came from and launched an emergency investigation.
24) A day later on Saturday Kerviel was called to Societe Generale to explain; in the meantime bank investigators confirmed that the large bank did not know about the trades.
25) After first not providing a clear explanation, Kerviel eventually confirmed that he had entered fictitious trades, the bank said. It then took a bank team throughout the night and into Sunday the 20th to identify all the exposure. Societe Generale's chief executive, Daniel Bouton, notified the governor of the Bank of France that day, and a decision was made to unwind the trades as quickly and as quietly as possible.
26) A complicating factor was that the bank was finishing work that Sunday on details of a separate announcement about the size of the multi-billion-dollar charge it would take for bad bets on mortgage-related investments in the United States. News of that misstep was delayed.
27) Societe Generale traders began unwinding Kerviel's losing bets at the beginning of European trading on Monday, just as Asian markets were in a free-fall and European shares were poised to plummet after a big drop in U.S. markets on the previous Friday. It took until Wednesday to finally close the books on Kerviel's adventures, the bank said.
28) Kerviel's lawyer cast suspicion on the way Societe Generale unwound the position, saying it did so in "totally unusual conditions."
29) "This decision was driven by other motives," he claimed, without elaborating.
30) Some experts have suggested Societe Generale may have exacerbated the market falls and indirectly led to the U.S. Federal Reserve's subsequent decision to cut rates.
31) But in its explanatory note released on Sunday, the bank defended itself by saying the trades represented no more than 8.1 percent of the volume in futures trading each day on the Eurostoxx, DAX and FTSE.
32) Mustier said Kerviel's motivations were still unclear. "We don't know, we don't understand" what drove him to do it, he said.
33) "This event is a massive shock for us," he said.
34) The bank said Kerviel built up two portfolios of investments -- but that one of them consisted of "fictional operations," leaving the bank hugely exposed.
35) "In order to ensure that these fictitious operations were not immediately identified, the trader used his years of experience in processing and controlling market operations to successively circumvent all the controls which allow the bank to check the characteristics of the operations carried out by its traders," said the bank's statement.
36) "He had a very good understanding of all of Societe Generale's processing and control procedures."
37) It was the bank's most detailed explanation yet of the debacle that has further rattled the banking industry -- already reeling from the subprime mortgage crisis in the United States. Some observers have said the crisis could also leave the bank vulnerable to a takeover.
38) An aide to French President Nicolas Sarkozy suggested the state could step in to prevent any possible hostile bids.
39) "I think the state will not stand idly by if any predator attempts to take advantage of the situation," Henri Guaino told RTL radio on Sunday.
40) It has prompted calls for tighter regulation -- 13 years after trader Nick Leeson, whose illegal speculation bankrupted British bank Barings, first highlighted the potential risks from rogue traders operating without proper oversight.
2008-01-28
Societe Generale says trader used multiple fraud techniques
(APW_ENG_20080128.0047)
1) Societe Generale has detailed how a trader evaded all its controls to bet euro50 billion (US$73.5 billion) -- more than the French bank's market worth -- on European markets, saying he hacked computers and "combined several fraudulent methods" to cover his tracks, causing billions in losses.
2) The bank says the trader, Jerome Kerviel, did not appear to have profited personally from the transactions and seemingly worked alone -- a version reiterated Sunday by Jean-Pierre Mustier, chief executive of the bank's corporate and investment banking arm.
3) But, in a conference call with reporters on Sunday, Mustier added: "I cannot guarantee to you 100 percent that there was no complicity."
4) Officials said Kerviel was cooperating with police, who held him for a second day of questioning Sunday, seeking answers to what, if confirmed, would be the biggest-ever trading fraud by a single person.
5) The questioning was "going very well and the investigation led by the specialists of the financial police is extremely fruitful," said Jean-Michel Aldebert, head of the financial section of the Paris prosecutor's office.
6) Kerviel was giving "very interesting" explanations, Aldebert added. "From what he told me, he was fine psychologically." He refused to say whether Kerviel might face preliminary charges.
7) Kerviel, 31, was taken into custody Saturday afternoon. He has not been seen in public since the bank's bombshell revelation Thursday that his unauthorized trades lost it euro4.9 billion (US$7.14 billion).
8) One of his lawyers said Sunday that the accusations of wrongdoing against Kerviel were being used to hide bad U.S. mortgage investments by the bank.
9) "He didn't steal anything, take anything, he didn't take any profit for himself," the lawyer, Christian Charriere-Bournazel, told The Associated Press by telephone. "The suspicion on Kerviel allows the considerable losses that the bank made on subprimes to be hidden."
10) The lawyer said Kerviel had made money for the bank through 2007 and he protested that the young trader had since been "thrown to the wolves of public opinion."
11) "He made profits for the bank until December 31. From January 1, he took risky positions like all traders," said the lawyer, who is also president of the Paris bar.
12) Even before his allegedly massive fraud came to light, Kerviel had apparently triggered occasional alarms at Societe Generale -- France's second-largest bank -- with his trading, but not to a degree that led managers to investigate further.
13) "Our controls basically identified from time to time problems with this trader's portfolio," said Mustier.
14) But Kerviel explained away the red flags as trading mistakes, added Mustier.
15) "The trade was canceled, there was no specific follow-up to do," he said. "From our understanding today, the number of mistakes was not higher than (for) any other trader, so from our understanding that was not a reason to ring a bell."
16) In a five-page statement Sunday, the bank said Kerviel used its money to build massive positions in futures contracts tied to the performance of baskets of stocks traded on exchanges in London, Paris, Frankfurt and other European markets.
17) Since those bets greatly exceeded the amount of capital he was allowed to put at risk, Kerviel entered fictitious and offsetting trades in Societe Generale's computer system that appeared to minimize the odds of big losses, the bank said. The trades were purposely chosen to avoid detection because they did not require cash contributions or be subject to margin calls, which would require putting up more money if the fictitious bet soured, it said.
18) The bank said he plowed euro30 billion ($44.12 billion) into the Eurostoxx index, another euro18 billion ($26.47 billion) on the DAX in Germany and euro2 billion on the FTSE in London. The combined value of those positions, euro50 billion (US$73.5 billion), is far more than the bank's market capitalization of euro35.9 billion (US$52.6 billion), and close to the annual GDP of countries such as Slovakia, Qatar or Libya.
19) Societe Generale took three days last week to sell or offset with hedges his contracts that amounted to bets on whether market indexes would rise or fall. But the bank sought Sunday to counter suggestions that its sell-off had caused already falling markets to plummet further than they otherwise might have done. The bank said it unwound Kerviel's positions in "a controlled fashion."
20) "Our impact on the market was quite minimal," said Mustier.
21) Societe Generale said Kerviel misappropriated other people's computer access codes, falsified documents and employed other methods to cover his tracks -- helped by his previous years of experience when he worked in other offices at the bank that monitor traders. Acquaintances described Kerviel as reserved and considerate, a young man who once taught children judo and held the door for elderly neighbors.
22) Kerviel's downfall started in the days before Friday, Jan. 18, when Societe Generale tightened lending restrictions on one of its customers, an unnamed large bank. He had apparently used that bank's name for one or more of his fictitious trades, and it led to what Societe Generale described as having "additional controls" put in place.
23) Kerviel's superiors in Societe Generale's equity trading division reviewed that day an e-mail from the large bank supposedly confirming trades he had booked. But they were suspicious about where the e-mail came from and launched an emergency investigation.
24) A day later on Saturday Kerviel was called to Societe Generale to explain; in the meantime bank investigators confirmed that the large bank did not know about the trades.
25) After first not providing a clear explanation, Kerviel eventually confirmed that he had entered fictitious trades, the bank said. It then took a bank team throughout the night and into Sunday the 20th to identify all the exposure. Societe Generale's chief executive, Daniel Bouton, notified the governor of the Bank of France that day, and a decision was made to unwind the trades as quickly and as quietly as possible.
26) A complicating factor was that the bank was finishing work that Sunday on details of a separate announcement about the size of the multi-billion-dollar charge it would take for bad bets on mortgage-related investments in the United States. News of that misstep was delayed.
27) Societe Generale traders began unwinding Kerviel's losing bets at the beginning of European trading on Monday, just as Asian markets were in a free-fall and European shares were poised to plummet after a big drop in U.S. markets on the previous Friday. It took until Wednesday to finally close the books on Kerviel's adventures, the bank said.
28) Kerviel's lawyer cast suspicion on the way Societe Generale unwound the position, saying it did so in "totally unusual conditions."
29) "This decision was driven by other motives," he claimed, without elaborating.
30) Some experts have suggested Societe Generale may have exacerbated the market falls and indirectly led to the U.S. Federal Reserve's subsequent decision to cut rates.
31) But in its explanatory note released on Sunday, the bank defended itself by saying the trades represented no more than 8.1 percent of the volume in futures trading each day on the Eurostoxx, DAX and FTSE.
32) Mustier said Kerviel's motivations were still unclear. "We don't know, we don't understand" what drove him to do it, he said.
33) "This event is a massive shock for us," he said.
34) The bank said Kerviel built up two portfolios of investments -- but that one of them consisted of "fictional operations," leaving the bank hugely exposed.
35) "In order to ensure that these fictitious operations were not immediately identified, the trader used his years of experience in processing and controlling market operations to successively circumvent all the controls which allow the bank to check the characteristics of the operations carried out by its traders," said the bank's statement.
36) "He had a very good understanding of all of Societe Generale's processing and control procedures."
37) It was the bank's most detailed explanation yet of the debacle that has further rattled the banking industry -- already reeling from the subprime mortgage crisis in the United States. Some observers have said the crisis could also leave the bank vulnerable to a takeover.
38) An aide to French President Nicolas Sarkozy suggested the state could step in to prevent any possible hostile bids.
39) "I think the state will not stand idly by if any predator attempts to take advantage of the situation," Henri Guaino told RTL radio on Sunday.
40) It has prompted calls for tighter regulation -- 13 years after trader Nick Leeson, whose illegal speculation bankrupted British bank Barings, first highlighted the potential risks from rogue traders operating without proper oversight.
French finance minister says Societe Generale trader appeared to act alone
(APW_ENG_20080128.0351)
1) France's finance minister said Monday that it appears the trader allegedly behind huge losses at French bank Societe Generale acted alone.
2) Christine Lagarde backed up comments from the bank, which accuses trader Jerome Kerviel of evading its controls to bet euro50 billion (US$73.5 billion) on European markets. "There is no reason in the current state to think that it was anything other than that it was -- a single trader," she told France-2 TV.
Societe Generale CEO revises down slightly estimated loss attributed to rogue trader
(APW_ENG_20080128.0372)
1) The chief executive of Societe Generale said Monday the French bank had revised downward the estimated loss caused by actions of an alleged rogue trader.
2) Daniel Bouton, speaking on Europe-1 radio, said the loss attributed to actions by futures trader Jerome Kerviel -- originally believed to be euro4.9 billion -- was "just over" euro4.82 billion (US$7.09 billion). Bouton also said the bank, which some believe could be vulnerable to a takeover, has not been approached by any possible suitor.
Lawyer says he expects alleged rogue trader to face preliminary charges
(APW_ENG_20080128.0403)
1) A lawyer for Jerome Kerviel said the alleged rogue trader accused by Societe Generale of causing billions of euros in losses will probably face preliminary charges later on Monday.
2) Police took Kerviel into custody on Saturday, and were expected to present him later Monday to a judge who must decide whether there is sufficient evidence of possible wrongdoing to warrant preliminary charges. Lawyer Christian Charriere-Bournazel said such charges were probable.
Lawyer says he expects alleged rogue trader to face preliminary charges
(APW_ENG_20080128.0431)
1) A lawyer for Jerome Kerviel said the alleged rogue trader accused by Societe Generale of causing billions of euros in losses will probably face preliminary charges later on Monday.
2) Police took Kerviel into custody on Saturday, and were expected to present him later Monday to a judge who must decide whether there is sufficient evidence of possible wrongdoing to warrant preliminary charges. Lawyer Christian Charriere-Bournazel said such charges were probable.
3) But the lawyer, who was speaking to Europe-1 radio, also said he was "convinced" that Kerviel will not be kept in prison while the judicial probe continues.
4) The lawyer reiterated what the bank also says -- that Kerviel did not appear to have profited personally. Charriere-Bournazel claimed that Kerviel had done well for the bank last year, making a profit of euro1.5 billion (US$2.21 billion) with his trades by end 2007.
5) "The expression 'fraudster' is totally misplaced," the lawyer said, adding that Kerviel "didn't embezzle a single centime."
Societe Generale trader set to appear before judge
(APW_ENG_20080128.0521)
1) The French trader accused by the Societe Generale bank of the biggest trading fraud by a single person was expected to appear Monday before a judge who will weigh whether to press preliminary charges.
2) Defense lawyer Christian Charriere-Bournazel said preliminary charges against Jerome Kerviel were likely. He also said he was "convinced" that the 31-year-old trader, who was still in police custody Monday morning, would be released while the judicial probe continues into Societe Generale's stunning losses.
3) Under French law, preliminary charges mean the judge has determined there is strong evidence to suggest involvement in a crime. It gives the investigator time to pursue the probe before deciding whether to send the suspect for trial or drop the case.
4) Finance Minister Christine Lagarde said it still appears that Kerviel acted alone.
5) Societe Generale revised downward slightly the amount Kerviel allegedly lost -- from euro4.9 billion ($7.21 billion) to "just over" euro4.82 billion (US$7.09 billion). CEO Daniel Bouton said the bank, thought by some experts to be vulnerable to a takeover, has not been approached by any suitor.
6) Bouton rejected suggestions from Kerviel's lawyers that Societe Generale was using Kerviel to hide big losses linked to the U.S. subprime mortgage crisis.
7) "How could you want to imagine that we would have been able to hide a hole by another hole? It's completely stupid," Bouton told Europe-1 radio.
8) Kerviel, 31, was taken into custody Saturday. Later Monday, a judge must decide whether there is enough evidence of possible wrongdoing to warrant preliminary charges.
9) Societe Generale alleges that Kerviel hacked computers and "combined several fraudulent methods" to build up positions worth euro50 billion ($73.53 billion) -- more that the bank's market worth.
10) Jean-Pierre Mustier, head of the bank's corporate and investment banking arm, told reporters Sunday that Kerviel appeared to have acted alone, but added: "I cannot guarantee to you 100 percent that there was no complicity." He also said Kerviel's motivation was unclear.
11) Even before his allegedly massive fraud came to light Thursday, Kerviel's trading apparently triggered occasional alarms at Societe Generale -- France's second-largest bank -- but not to a degree that led managers to investigate further. Kerviel had explained away the red flags as mistakes, according to Mustier.
12) The bank says Kerviel built up futures positions worth euro30 billion ($44.12 billion) into the Eurostoxx index, another euro18 billion ($26.47 billion) on Germany's DAX and euro2 billion on the London FTSE.
13) Since the bets greatly exceeded the amount of capital he was allowed to risk, Kerviel entered fake and offsetting trades in Societe Generale's computer system that appeared to minimize the odds of big losses, the bank said. The trades were purposely chosen to avoid detection because they did not require cash contributions nor were subject to margin calls, which would require putting up more money if the fake bet soured, it said.
14) Societe Generale said Kerviel's positions were unwound last week over three days in a "controlled fashion."
15) Societe Generale said Kerviel used other people's computer access codes, falsified documents and used other methods to cover his tracks -- helped by his previous experience in other offices at the bank that monitor traders.
16) Kerviel's downfall started in the days before Friday, Jan. 18, when Societe Generale tightened lending restrictions on one of its customers, an unnamed large bank. He apparently had used that bank's name for one or more of his fictitious trades, and it led to what Societe Generale described as having "additional controls" put in place.
17) Kerviel's superiors in Societe Generale's equity trading division reviewed that day an e-mail from the large bank supposedly confirming trades he had booked. But they were suspicious about where the e-mail came from and launched an emergency investigation.
18) Kerviel then was called to Societe Generale to explain. Bank investigators confirmed that the large bank did not know about the trades. Kerviel did not provide a clear explanation at first but eventually confirmed he had entered fictitious trades, the bank said.
Prosecutor: Trader did not enrich himself but still faces preliminary charges
(APW_ENG_20080128.0574)
1) A Paris prosecutor on Monday asked for preliminary charges of forgery, breach of trust and fraud to be filed against a trader accused by Societe Generale bank of causing the biggest trading fraud by a single person.
2) The prosecutor, Jean-Claude Marin, also for the first time gave an inkling of what motivated the trader, Jerome Kerviel. He said the 31-year-old did not seek personal profit but wanted to be "an exceptional trader."
Prosecutor: Trader did not enrich himself but still faces preliminary charges
(APW_ENG_20080128.0601)
1) A Paris prosecutor on Monday asked for preliminary charges of forgery, breach of trust and fraud to be filed against a trader accused by Societe Generale bank of causing the biggest trading fraud by a single person.
2) Prosecutor Jean-Claude Marin for the first time said the trader, 31-year-old Jerome Kerviel, did not seek personal profit but wanted to be "an exceptional trader."
3) "The investigation shows very clearly at the moment that Monsieur Kerviel acted alone and the investigation has not demonstrated any complicity," Marin told reporters.
4) Kerviel, who has been in police custody since Saturday, fully cooperated with investigator and admitted "a certain number of acts," he added.
Societe Generale trader could face multiple preliminary charges of fraud, forgery
(APW_ENG_20080128.0638)
1) A Paris prosecutor on Monday asked for preliminary charges of forgery, breach of trust and fraud against Jerome Kerviel, accused by Societe Generale bank of causing the largest-ever trading fraud by a single person.
2) The prosecutor, Jean-Claude Marin, also for the first time gave an inkling of what motivated the low-level trader. He said the 31-year-old did not seek personal profit and had not sought to despoil the bank but wanted to be "an exceptional trader" and earn performance bonuses.
3) "It's always a bit for money, I'm not sure that was his prime motive," said the prosecutor. "It functions a bit like a drug, it's an addiction, ... there's a sort of spiral you can't get out of."
4) Marin was speaking as police wrapped up nearly 48 hours of questioning Kerviel. The trader was to appear before a judge who would decide whether to proceed with preliminary charges.
5) Under French law, filing preliminary charges means the judge has determined there is strong evidence to suggest involvement in a crime. It gives the investigator time to pursue the probe before deciding whether to send the suspect for trial or drop the case.
6) The prosecutor said Kerviel could face a maximum seven years imprisonment if convicted under the charges he was seeking.
7) Societe Generale revised downward slightly the amount Kerviel allegedly lost -- from euro4.9 billion ($7.21 billion) to "just over" euro4.82 billion (US$7.09 billion). CEO Daniel Bouton said the bank, thought by some experts to be vulnerable to a takeover, has not been approached by any suitor.
8) The bank, however, was struggling. Societe Generale shares were trading down 6.6 percent at euro68.98 (US$101.43) at midday Monday amid generally falling shares.
9) Bouton rejected suggestions from Kerviel's lawyers that Societe Generale was using Kerviel to hide big losses linked to the U.S. subprime mortgage crisis.
10) "How could you want to imagine that we would have been able to hide a hole by another hole? It's completely stupid," Bouton told Europe-1 radio. He called Kerviel a "remarkable concealer" who had managed to outwit the bank's risk control systems.
11) Elisabeth Meyer, one of Kerviel's defense lawyers, said he was "bearing up to the shock."
12) She disputed Societe Generale claims that he had committed fraud, saying he was in the black with his trades as of Dec. 31.
13) "In my view, he was thrown to the lions before being able to explain himself," said Meyer. "It's a lynching."
14) Societe Generale alleges that Kerviel hacked computers and "combined several fraudulent methods" to build up positions worth euro50 billion ($73.53 billion) -- more that the bank's market worth.
15) Jean-Pierre Mustier, head of the bank's corporate and investment banking arm, told reporters Sunday that Kerviel appeared to have acted alone, but added: "I cannot guarantee to you 100 percent that there was no complicity."
16) Even before his allegedly massive fraud came to light Thursday, Kerviel's trading apparently triggered occasional alarms at Societe Generale -- France's second-largest bank -- but not to a degree that led managers to investigate further. Kerviel had explained away the red flags as mistakes, according to Mustier.
17) The bank says Kerviel built up futures positions worth euro30 billion ($44.12 billion) into the Eurostoxx index, another euro18 billion ($26.47 billion) on Germany's DAX and euro2 billion on the London FTSE.
18) Since the bets greatly exceeded the amount of capital he was allowed to risk, Kerviel entered fake and offsetting trades in Societe Generale's computer system that appeared to minimize the odds of big losses, the bank said. The trades were purposely chosen to avoid detection because they did not require cash contributions nor were subject to margin calls, which would require putting up more money if the fake bet soured, it said.
19) Societe Generale said Kerviel's positions were unwound last week over three days in a "controlled fashion."
20) Societe Generale said Kerviel used other people's computer access codes, falsified documents and used other methods to cover his tracks -- helped by his previous experience in other offices at the bank that monitor traders.
21) Kerviel's downfall started in the days before Friday, Jan. 18, when Societe Generale tightened lending restrictions on one of its customers, an unnamed large bank. He apparently had used that bank's name for one or more of his fictitious trades, and it led to what Societe Generale described as having "additional controls" put in place.
22) Kerviel's superiors in Societe Generale's equity trading division reviewed that day an e-mail from the large bank supposedly confirming trades he had booked. But they were suspicious about where the e-mail came from and launched an emergency investigation.
23) Kerviel then was called to Societe Generale to explain. Bank investigators confirmed that the large bank did not know about the trades. Kerviel did not provide a clear explanation at first but eventually confirmed he had entered fictitious trades, the bank said.
Societe Generale trader could face multiple preliminary charges of fraud, forgery
(APW_ENG_20080128.0820)
1) A Paris prosecutor on Monday asked for preliminary charges of forgery, breach of trust and fraud against Jerome Kerviel, accused by Societe Generale bank of causing the largest-ever trading fraud by a single person.
2) The prosecutor, Jean-Claude Marin, also for the first time gave an inkling of what motivated the low-level trader. He said the 31-year-old did not seek personal profit and had not sought to despoil the bank but wanted to be "an exceptional trader" and earn performance bonuses.
3) "It's always a bit for money, I'm not sure that was his prime motive," said the prosecutor. "It functions a bit like a drug, it's an addiction ... there's a sort of spiral you can't get out of."
4) Marin was speaking as police wrapped up nearly 48 hours of questioning Kerviel. The trader was to appear before a judge who would decide whether to proceed with preliminary charges.
5) Under French law, filing preliminary charges means the judge has determined there is strong evidence to suggest involvement in a crime. It gives the investigator time to pursue the probe before deciding whether to send the suspect for trial or drop the case.
6) The prosecutor said Kerviel could face a maximum seven years imprisonment if convicted under the charges he was seeking.
7) Societe Generale revised downward slightly the amount Kerviel allegedly lost -- from euro4.9 billion ($7.21 billion) to "just over" euro4.82 billion (US$7.09 billion). CEO Daniel Bouton said the bank, thought by some experts to be vulnerable to a takeover, has not been approached by any suitor.
8) The bank, however, was struggling. Societe Generale shares were trading down 6.6 percent at euro68.98 (US$101.43) at midday Monday amid generally falling shares.
9) Separately Monday, France's market watchdog said in a routine disclosure that a member of Societe Generale's board, Robert A. Day, sold euro85.75 million ($126.1 million) worth of shares in the bank on Jan. 9 -- two weeks before the fraud announcement and well before bank managment says it discovered the problem. Day is an investment manager with U.S.-based Trust Company of the West, or TCW, who Forbes magazine says has a net worth is US$1.6 billion.
10) Two foundations linked to Day, the Robert A. Day Foundation and the Kelly Day Foundation, also sold a total of euro9.59 million ($14.1 million) worth of shares one day later, on Jan. 10, the market watchdog reported. Regulators made no allegation of wrongdoing.
11) Bouton rejected suggestions from Kerviel's lawyers that Societe Generale was using Kerviel to hide big losses linked to the U.S. subprime mortgage crisis.
12) "How could you want to imagine that we would have been able to hide a hole by another hole? It's completely stupid," Bouton told Europe-1 radio. He called Kerviel a "remarkable concealer" who had managed to outwit the bank's risk control systems by toggling between real and fictitious positions.
13) "That's what created this gigantic fraud."
14) Elisabeth Meyer, one of Kerviel's defense lawyers, said he was "bearing up to the shock."
15) She disputed Societe Generale claims that he had committed fraud, saying he was in the black with his trades as of Dec. 31.
16) "In my view, he was thrown to the lions before being able to explain himself," said Meyer. "It's a lynching."
17) Societe Generale alleges that Kerviel hacked computers and "combined several fraudulent methods" to build up positions worth euro50 billion ($73.53 billion) -- more that the bank's market worth.
18) Jean-Pierre Mustier, head of the bank's corporate and investment banking arm, told reporters Sunday that Kerviel appeared to have acted alone, but added: "I cannot guarantee to you 100 percent that there was no complicity."
19) Even before his allegedly massive fraud came to light Thursday, Kerviel's trading apparently triggered occasional alarms at Societe Generale -- France's second-largest bank -- but not to a degree that led managers to investigate further. Kerviel had explained away the red flags as mistakes, according to Mustier.
20) The bank says Kerviel built up futures positions worth euro30 billion ($44.12 billion) into the Eurostoxx index, another euro18 billion ($26.47 billion) on Germany's DAX and euro2 billion on the London FTSE.
21) Since the bets greatly exceeded the amount of capital he was allowed to risk, Kerviel entered fake and offsetting trades in Societe Generale's computer system that appeared to minimize the odds of big losses, the bank said. The trades were purposely chosen to avoid detection because they did not require cash contributions nor were subject to margin calls, which would require putting up more money if the fake bet soured, it said.
22) Societe Generale said Kerviel's positions were unwound last week over three days in a "controlled fashion."
23) Societe Generale said Kerviel used other people's computer access codes, falsified documents and used other methods to cover his tracks -- helped by his previous experience in other offices at the bank that monitor traders.
24) Kerviel's downfall started in the days before Friday, Jan. 18, when Societe Generale tightened lending restrictions on one of its customers, an unnamed large bank. He apparently had used that bank's name for one or more of his fictitious trades, and it led to what Societe Generale described as having "additional controls" put in place.
25) Kerviel's superiors in Societe Generale's equity trading division reviewed that day an e-mail from the large bank supposedly confirming trades he had booked. But they were suspicious about where the e-mail came from and launched an emergency investigation.
26) Kerviel then was called to Societe Generale to explain. Bank investigators confirmed that the large bank did not know about the trades. Kerviel did not provide a clear explanation at first but eventually confirmed he had entered fictitious trades, the bank said.
How the Societe Generale trading scandal unfurled
(APW_ENG_20080128.0932)
1) A look at how Societe General's trading scandal occurred:
2) -- 2000: Jerome Kerviel joins Societe Generale, working in offices that monitor trades.
3) -- 2005: Kerviel promoted to more glamorous arbitrage trading desk, where his job consisted of making profits from small differences in prices between different markets.
4) -- Late 2006: Kerviel begins making transactions that the bank now says were apparent precursors to his later alleged massive fraud.
5) -- Jan. 18, 2008: Bank launches an emergency in-house investigation after Kerviel's transactions begin raising red flags.
6) -- Jan. 19: Kerviel called to Societe Generale to explain. Bank says he first doesn't provide clear explanation but then confirms that he entered fictitious trades.
7) -- Jan. 20: Bank team works overnight to identify the exposure. CEO Daniel Bouton notifies Bank of France.
8) -- Jan. 21: Bank starts quickly and quietly unwinding positions in European markets.
9) -- Jan. 23: Position closed or hedged.
10) -- Jan. 24: Societe Generale alleges the "massive" fraud cost euro4.9 billion (US$7.14 billion).
11) -- Jan. 25: Bank apologizes to shareholders in newspaper ads. Police search Kerviel's apartment.
12) -- Jan. 26: Police take Kerviel into custody.
13) -- Jan. 27: The bank says Kerviel "combined several fraudulent methods" to cover his tracks, such as falsifying documents and swiping computer access codes. It says he bet euro50 billion (US$73.8 billion) -- more than the bank's net worth -- on futures contracts at three European equity indices. His lawyers fight back, suggesting bank is making scapegoat of Kerviel to hide losses on U.S. mortgages.
14) -- Jan. 28: Prosecutor requests preliminary charges of forgery, breach of trust and fraud against Kerviel, and says Kerviel could face up to seven years if convicted.
Societe Generale trader could face multiple preliminary charges of fraud, forgery
(APW_ENG_20080128.0975)
1) A Paris prosecutor on Monday asked for preliminary charges of forgery, breach of trust and fraud against Jerome Kerviel, accused by Societe Generale bank of causing the largest-ever trading fraud by a single person.
2) The prosecutor, Jean-Claude Marin, also for the first time gave an inkling of what motivated the low-level trader. He said the 31-year-old did not seek personal profit and had not sought to despoil the bank but wanted to be "an exceptional trader" and earn performance bonuses.
3) "It's always a bit for money, I'm not sure that was his prime motive," said the prosecutor. "It functions a bit like a drug, it's an addiction ... there's a sort of spiral you can't get out of."
4) The prosecutor said Kerviel was expecting a euro300,000 ($441,150) bonus for 2007 -- a larger-than-usual sum for the trader. The bank says it lost euro4.82 billion (US$7.09 billion) because of his actions.
5) Police wrapped up nearly 48 hours of questioning Kerviel. The trader was to appear before a judge who would decide whether to proceed with preliminary charges.
6) Under French law, filing preliminary charges means the judge has determined there is strong evidence to suggest involvement in a crime. It gives the investigator time to pursue the probe before deciding whether to send the suspect for trial or drop the case.
7) The prosecutor said Kerviel could face a maximum seven years imprisonment if convicted under the charges he was seeking.
8) Marin said Kerviel told them that he acted alone. The bank's offices were searched Friday and Marin said "masses of documents," many of them computer records, were seized for the investigation.
9) CEO Daniel Bouton said Societe Generale, thought by some experts to be vulnerable to a takeover, has not been approached by any suitor.
10) The banks shares were down nearly 4 percent, euro70.94 ($104.32) shortly before the close in Paris on Monday, in a market trading only slightly down.
11) Meanwhile, questions mounted about how the company handled the fraud discovery. A lawyer for a group of Societe Generale shareholders, Frederik Canoy, said they had filed a legal complaint asking investigators to look into possible insider trading.
12) His announcement came after France's market watchdog said in a routine disclosure that a member of Societe Generale's board, Robert A. Day, sold euro85.75 million ($126.1 million) worth of shares in the bank on Jan. 9 -- two weeks before the fraud announcement and well before bank management says it knew about the problem. Day is an investment manager with U.S.-based Trust Company of the West, or TCW, who Forbes magazine says has a net worth is US$1.6 billion.
13) Two foundations linked to Day, the Robert A. Day Foundation and the Kelly Day Foundation, also sold a total of euro9.59 million ($14.1 million) worth of shares one day later, on Jan. 10, the market watchdog reported. Regulators made no allegation of wrongdoing.
14) Bouton rejected suggestions from Kerviel's lawyers that Societe Generale was using Kerviel to hide big losses linked to the U.S. subprime mortgage crisis.
15) "How could you want to imagine that we would have been able to hide a hole by another hole? It's completely stupid," Bouton told Europe-1 radio. He called Kerviel a "remarkable concealer" who had managed to outwit the bank's risk control systems by toggling between real and fictitious positions.
16) "That's what created this gigantic fraud."
17) Elisabeth Meyer, one of Kerviel's defense lawyers, said he was "bearing up to the shock."
18) She disputed Societe Generale claims that he had committed fraud, saying he was in the black with his trades as of Dec. 31.
19) "In my view, he was thrown to the lions before being able to explain himself," said Meyer. "It's a lynching."
20) Another lawyer, Christian Charriere-Bournazel, said on Europe-1 radio that Kerviel was making a "profit" for the bank of euro1.5 billion ($2.2 billion) before his bets went sour.
21) The prosecutor, however, said the trader only "virtually" made a profit for the bank.
22) Analysts still had many questions about how the fraud unfolded after the bank sent out a five-page explanation Sunday of the events.
23) Societe Generale alleges that Kerviel used other people's computer access codes, falsified documents and used other methods to cover his tracks -- helped by his previous experience in other offices at the bank that monitor traders. It says he bet some euro50 billion ($73.53 billion) -- more that the bank's market worth -- on European markets.
Judges file charges against French trader accused of massive fraud, release him
(APW_ENG_20080128.1145)
1) Investigating judges filed preliminary charges Monday against a trader accused of causing billions of euros (dollars) of losses for France's second-largest bank, and he was released from custody while the thorny investigation continues, his lawyer said.
2) The preliminary charges were for "breach of trust" and unauthorized computer activity, said Jerome Kerviel's lawyer, Christian Charriere-Bournazel. The lawyer also said Kerviel had been released, but not did not disclose his whereabouts.
Judges file charges against French trader release him
(APW_ENG_20080128.1157)
1) Investigating judges filed preliminary charges Monday against a trader accused of causing billions of euros (dollars) of losses for France's second-largest bank, and he was released from custody while the thorny investigation continues, his lawyer said.
2) The preliminary charges were for "breach of trust" and unauthorized computer activity, Jerome Kerviel's lawyer, Christian Charriere-Bournazel, told the reporters outside headquarters of the Paris financial police.
3) The lawyer said Kerviel had been released, but not did not disclose his whereabouts. He said Kerviel would be subject to "very minor" monitoring by authorities, though he did not elaborate.
4) The prosecutor had asked earlier Monday for charges on two other counts as well: attempted fraud and forgery. The investigating judges did not pursue those, the lawyer said, without elaborating.
5) Elisabeth Meyer, another of Kerviel's defense lawyers, praised the decision, saying, "We have a victory."
6) If convicted, Kerviel could face up to seven years in prison with a hefty fine.
7) Under French law, filing preliminary charges means an investigating magistrate has determined there is strong evidence to suggest involvement in a crime. It gives the investigator time to pursue the probe before deciding whether to send the suspect for trial or drop the case.
Judges file charges against French trader release him
(APW_ENG_20080128.1278)
1) Investigating judges filed preliminary charges Monday against a trader accused of causing billions of euros (dollars) of losses for France's second-largest bank, and he was released from custody while the thorny investigation continues, his lawyer said.
2) The preliminary charges were for "breach of trust" and unauthorized computer activity, Jerome Kerviel's lawyer, Christian Charriere-Bournazel, told the reporters outside the headquarters of the Paris financial police.
3) The lawyer said Kerviel had been released, but did not disclose his whereabouts. The prosecutor's office said it had appealed the decision to release him.
4) The prosecutor had asked earlier Monday for charges on attempted fraud. The investigating judges did not pursue those, the lawyer said, without elaborating. It was not immediately clear whether the judges were pursuing charges of forgery, also requested by the prosecutor.
5) Elisabeth Meyer, another of Kerviel's defense lawyers, praised the court decision, saying, "We have a victory."
6) If convicted, Kerviel could face up to seven years in prison with a hefty fine.
7) Under French law, filing preliminary charges means an investigating magistrate has determined there is strong evidence to suggest involvement in a crime. It gives the investigator time to pursue the probe before deciding whether to send the suspect for trial or drop the case.
Societe Generale trader could face multiple preliminary charges of fraud, forgery
(APW_ENG_20080128.1310)
1) Investigating judges filed preliminary charges Monday against a trader accused of causing billions of euros (dollars) in losses for France's second-largest bank. He was released from custody while the thorny investigation continues.
2) Preliminary charges of "breach of trust" and unauthorized computer activity were filed against Jerome Kerviel, his lawyer, Christian Charriere-Bournazel, told reporters. The judges did not pursue a fraud charge sought by the prosecutor's office, or even continue to hold him as the prosecutor wanted for fear he might flee.
3) The Paris prosecutor's office said it was appealing the decision to free Kerviel, who had been held since Saturday.
4) The lighter-than-expected charges came as Paris prosecutor Jean-Claude Marin gave a glimpse for the first time of what motivated the 31-year-old futures trader: not tremendous greed but simply the adrenaline rush of trading, and perhaps the promise of a better-than-average bonus.
5) The bank and prosecutors have said Kerviel did not appear to have profited from his unauthorized dealings, and his lawyers described him as a "modest boy" who got in over his head.
6) Still, Monday's charges, filed after questioning Kerviel for 48 hours, could bring him up to seven years in prison and hefty fines.
7) The banking world was stunned when Societe Generale announced a "massive fraud" last week that had cost it euro4.82 billion (US$7.09 billion). The news overshadowed the bank's substantial losses linked to the crisis in subprime mortgages.
8) Pressure on Societe Generale mounted, with stocks faltering, an insider trading claim and questions about how the bank failed to notice a young trader's parallel trading activity -- despite alerts.
9) The Paris prosecutor said Kerviel acted alone and had begun his deception in late 2005. His speculation eventually triggered "a certain number of alerts" from the middle office, accounting or risk services, the prosecutor said. They received falsified responses from Kerviel.
10) In November 2007, Eurex "became concerned" by a position taken by Kerviel. However, Kerviel was able to wiggle out, the prosecutor said.
11) The bank would not comment on the Eurex or other "alerts."
12) Kerviel told investigators his actions were in line with what other traders did, but on a larger scale, the prosecutor said.
13) "If his positions were more massive than others, other traders acted like him, on a lesser level...," Marin said. "He considered simply that for a long time he had generated winning positions. He seemed to benefit from a certain tolerance."
14) Kerviel told investigators, "I exploded my line of credit," Marin said.
15) "Societe Generale is a victim at this stage," the prosecutor said -- noting, however, that the complex investigation was just getting under way.
16) A lawyer for a group of Societe Generale shareholders, Frederik Canoy, said they had filed a legal complaint Monday asking investigators to look into possible insider trading.
17) France's market watchdog said in a routine disclosure that a member of Societe Generale's board, Robert A. Day, sold euro85.75 million ($126.1 million) worth of shares in the bank on Jan. 9 -- two weeks before the fraud announcement and well before bank management says it discovered the problem. Day is an investment manager with U.S.-based Trust Company of the West, or TCW.
18) Two foundations linked to Day, the Robert A. Day Foundation and the Kelly Day Foundation, also sold a total of euro9.59 million ($14.1 million) worth of shares one day later, on Jan. 10, the market watchdog reported. Regulators made no allegation of wrongdoing.
19) Meanwhile, the lawyer said Kerviel had been released, but not did not disclose his whereabouts. Kerviel was ordered to stay in France and not to talk to employees of Societe Generale -- except those at his bank branch.
20) "The judges understood that, in reality, he is a boy who wanted to work with the justice system, and that he has no desire to flee, contrary to what has been claimed, nor hide anything," Charriere-Bournazel told France-2 television.
21) Another lawyer for the trader, Elisabeth Meyer, called the lighter charges a "victory."
22) Under French law, filing preliminary charges means an investigating magistrate has determined there is strong evidence to suggest involvement in a crime. It gives the investigator time to pursue the probe before deciding whether to send the suspect for trial or drop the case.
23) Earlier Monday, prosecutor Marin said Kerviel had not sought to despoil the bank but wanted to be "an exceptional trader" and earn performance bonuses.
24) "It's always a bit for money, I'm not sure that was his prime motive," said the prosecutor. "It functions a bit like a drug, it's an addiction ... there's a sort of spiral you can't get out of."
25) The prosecutor said Kerviel was expecting a euro300,000 (US$441,000) bonus for 2007 -- a larger-than-usual sum for the trader but nothing near the billions the bank says it lost trying to undo his actions.
26) CEO Daniel Bouton said Societe Generale, thought by some experts to be vulnerable to a takeover, has not been approached by any suitor.
27) Bouton rejected suggestions from Kerviel's lawyers that Societe Generale was using Kerviel to hide big losses linked to the U.S. subprime mortgage crisis.
28) Meyer, one of Kerviel's defense lawyers, disputed Societe Generale's claims that her client had committed fraud, saying he was in the black with his trades as of Dec. 31.
29) Lawyer Charriere-Bournazel, said on Europe-1 radio that Kerviel was making a "profit" for the bank of euro1.5 billion ($2.2 billion) before his bets went sour. The prosecutor concurred but said the trader only "virtually" made a profit for the bank.
30) The prosecutor, based on Kerviel's account to investigators, confirmed Societe Generale's contention that the trader used other people's computer access codes, falsified documents and used other methods to cover his tracks -- helped by his previous experience in other offices at the bank that monitor traders. The bank says he bet some euro50 billion ($73.53 billion) -- more that the bank's market worth -- on European markets.
31) Societe Generale shares dropped nearly 7 percent Monday before closing down 3.8 percent at euro71.05 ($104.48) in a French market trading only slightly down.
Societe Generale trader could face multiple preliminary charges of fraud, forgery
(APW_ENG_20080128.1324)
1) Investigating judges filed preliminary charges Monday against a trader accused of causing billions of euros (dollars) in losses for France's second-largest bank. He was released from custody while the thorny investigation continues.
2) Preliminary charges of "breach of trust" and unauthorized computer activity were filed against Jerome Kerviel, his lawyer, Christian Charriere-Bournazel, told reporters. The judges did not pursue a fraud charge sought by the prosecutor's office, or even continue to hold him as the prosecutor wanted for fear he might flee.
3) The Paris prosecutor's office said it was appealing the decision to free Kerviel, who had been held since Saturday.
4) The lighter-than-expected charges came as Paris prosecutor Jean-Claude Marin gave a glimpse for the first time of what motivated the 31-year-old futures trader: not tremendous greed but simply the adrenaline rush of trading, and perhaps the promise of a better-than-average bonus.
5) The bank and prosecutors have said Kerviel did not appear to have profited from his unauthorized dealings, and his lawyers described him as a "modest boy" who got in over his head.
6) Still, Monday's charges, filed after questioning Kerviel for 48 hours, could bring him up to seven years in prison and hefty fines.
7) The banking world was stunned when Societe Generale announced a "massive fraud" last week that had cost it euro4.82 billion (US$7.09 billion). The news overshadowed the bank's substantial losses linked to the crisis in subprime mortgages.
8) Pressure on Societe Generale mounted, with stocks faltering, an insider trading claim and questions about how the bank failed to notice a young trader's parallel trading activity -- despite alerts.
9) The Paris prosecutor said Kerviel acted alone and had begun his deception in late 2005. His speculation eventually triggered "a certain number of alerts" from the middle office, accounting or risk services, the prosecutor said. They received falsified responses from Kerviel.
10) In November 2007, Eurex "became concerned" by a position taken by Kerviel. However, Kerviel was able to wiggle out, the prosecutor said.
11) The bank would not comment on the Eurex or other "alerts."
12) Kerviel told investigators his actions were in line with what other traders did, but on a larger scale, the prosecutor said.
13) "If his positions were more massive than others, other traders acted like him, on a lesser level...," Marin said. "He considered simply that for a long time he had generated winning positions. He seemed to benefit from a certain tolerance."
14) Kerviel told investigators, "I exploded my line of credit," Marin said.
15) "Societe Generale is a victim at this stage," the prosecutor said -- noting, however, that the complex investigation was just getting under way.
16) A lawyer for a group of Societe Generale shareholders, Frederik Canoy, said they had filed a legal complaint Monday asking investigators to look into possible insider trading.
17) France's market watchdog said in a routine disclosure that a member of Societe Generale's board, Robert A. Day, sold euro85.75 million ($126.1 million) worth of shares in the bank on Jan. 9 -- two weeks before the fraud announcement and well before bank management says it discovered the problem. Day is an investment manager with U.S.-based Trust Company of the West, or TCW.
18) Two foundations linked to Day, the Robert A. Day Foundation and the Kelly Day Foundation, also sold a total of euro9.59 million ($14.1 million) worth of shares one day later, on Jan. 10, the market watchdog reported. Regulators made no allegation of wrongdoing.
19) Josh Pekarsky, a spokesman for Day, said all required government disclosures were made. Day has pledged his cooperation in any inquiries.
20) "No inside information was used in any way with respect to these sales," Pekarsky said.
21) Meanwhile, Kerviel's lawyer said he had been released, but not did not disclose his whereabouts. Kerviel was ordered to stay in France and not to talk to employees of Societe Generale -- except those at his bank branch.
22) "The judges understood that, in reality, he is a boy who wanted to work with the justice system, and that he has no desire to flee, contrary to what has been claimed, nor hide anything," Charriere-Bournazel told France-2 television.
23) Another lawyer for the trader, Elisabeth Meyer, called the lighter charges a "victory."
24) Under French law, filing preliminary charges means an investigating magistrate has determined there is strong evidence to suggest involvement in a crime. It gives the investigator time to pursue the probe before deciding whether to send the suspect for trial or drop the case.
25) Earlier Monday, prosecutor Marin said Kerviel had not sought to despoil the bank but wanted to be "an exceptional trader" and earn performance bonuses.
26) "It's always a bit for money, I'm not sure that was his prime motive," said the prosecutor. "It functions a bit like a drug, it's an addiction ... there's a sort of spiral you can't get out of."
27) The prosecutor said Kerviel was expecting a euro300,000 (US$441,000) bonus for 2007 -- a larger-than-usual sum for the trader but nothing near the billions the bank says it lost trying to undo his actions.
28) CEO Daniel Bouton said Societe Generale, thought by some experts to be vulnerable to a takeover, has not been approached by any suitor.
29) Bouton rejected suggestions from Kerviel's lawyers that Societe Generale was using Kerviel to hide big losses linked to the U.S. subprime mortgage crisis.
30) Meyer, one of Kerviel's defense lawyers, disputed Societe Generale's claims that her client had committed fraud, saying he was in the black with his trades as of Dec. 31.
31) Lawyer Charriere-Bournazel, said on Europe-1 radio that Kerviel was making a "profit" for the bank of euro1.5 billion ($2.2 billion) before his bets went sour. The prosecutor concurred but said the trader only "virtually" made a profit for the bank.
32) The prosecutor, based on Kerviel's account to investigators, confirmed Societe Generale's contention that the trader used other people's computer access codes, falsified documents and used other methods to cover his tracks -- helped by his previous experience in other offices at the bank that monitor traders. The bank says he bet some euro50 billion ($73.53 billion) -- more that the bank's market worth -- on European markets.
33) Societe Generale shares dropped nearly 7 percent Monday before closing down 3.8 percent at euro71.05 ($104.48) in a French market trading only slightly down.
How the Societe Generale trading scandal unfurled
(APW_ENG_20080128.1349)
1) A look at how Societe General's trading scandal occurred:
2) -- 2000: Jerome Kerviel joins Societe Generale, working in offices that monitor trades.
3) -- 2005: Kerviel promoted to more glamorous arbitrage trading desk, where his job consisted of making profits from small differences in prices between different markets.
4) -- Late 2006: Kerviel begins making transactions that the bank now says were apparent precursors to his later alleged massive fraud.
5) -- Jan. 18, 2008: Bank launches an emergency in-house investigation after Kerviel's transactions begin raising red flags.
6) -- Jan. 19: Kerviel called to Societe Generale to explain. Bank says he first doesn't provide clear explanation but then confirms that he entered fictitious trades.
7) -- Jan. 20: Bank team works overnight to identify the exposure. CEO Daniel Bouton notifies Bank of France.
8) -- Jan. 21: Bank starts quickly and quietly unwinding positions in European markets.
9) -- Jan. 23: Position closed or hedged.
10) -- Jan. 24: Societe Generale alleges the "massive" fraud cost euro4.9 billion (US$7.14 billion).
11) -- Jan. 25: Bank apologizes to shareholders in newspaper ads. Police search Kerviel's apartment.
12) -- Jan. 26: Police take Kerviel into custody.
13) -- Jan. 27: The bank says Kerviel "combined several fraudulent methods" to cover his tracks, such as falsifying documents and swiping computer access codes. It says he bet euro50 billion (US$73.8 billion) -- more than the bank's net worth -- on futures contracts at three European equity indices. His lawyers fight back, suggesting bank is making scapegoat of Kerviel to hide losses on U.S. mortgages.
14) -- Jan. 28: Prosecutor requests preliminary charges of forgery, breach of trust and fraud against Kerviel, and says Kerviel could face up to seven years if convicted. Kerviel is released from custody on condition he remain in France.
2008-01-29
Societe Generale trader could face multiple preliminary charges of fraud, forgery
(APW_ENG_20080129.0045)
1) Investigating judges have filed preliminary charges against a trader accused of causing billions of euros (dollars) in losses for France's second-largest bank. He was released from custody while the thorny investigation continues.
2) Preliminary charges of "breach of trust" and unauthorized computer activity were filed Monday against Jerome Kerviel, his lawyer, Christian Charriere-Bournazel, told reporters. The judges did not pursue a fraud charge sought by the prosecutor's office, or even continue to hold him as the prosecutor wanted for fear he might flee.
3) The Paris prosecutor's office said it was appealing the decision to free Kerviel, who had been held since Saturday.
4) The lighter-than-expected charges came as Paris prosecutor Jean-Claude Marin gave a glimpse for the first time of what motivated the 31-year-old futures trader: not tremendous greed but simply the adrenaline rush of trading, and perhaps the promise of a better-than-average bonus.
5) The bank and prosecutors have said Kerviel did not appear to have profited from his unauthorized dealings, and his lawyers described him as a "modest boy" who got in over his head.
6) Still, Monday's charges, filed after questioning Kerviel for 48 hours, could bring him up to seven years in prison and hefty fines.
7) The banking world was stunned when Societe Generale announced a "massive fraud" last week that had cost it euro4.82 billion (US$7.09 billion). The news overshadowed the bank's substantial losses linked to the crisis in subprime mortgages.
8) Pressure on Societe Generale mounted, with stock shares faltering, an insider trading claim and questions about how the bank failed to notice a young trader's parallel trading activity -- despite alerts.
9) The Paris prosecutor said Kerviel acted alone and had begun his deception in late 2005. His speculation eventually triggered "a certain number of alerts" from the middle office, accounting or risk services, the prosecutor said. They received falsified responses from Kerviel.
10) In November 2007, Eurex "became concerned" by a position taken by Kerviel. However, Kerviel was able to wiggle out, the prosecutor said.
11) The bank would not comment on the Eurex or other "alerts."
12) Kerviel told investigators his actions were in line with what other traders did, but on a larger scale, the prosecutor said.
13) "If his positions were more massive than others, other traders acted like him, on a lesser level...," Marin said. "He considered simply that for a long time he had generated winning positions. He seemed to benefit from a certain tolerance."
14) Kerviel told investigators, "I exploded my line of credit," Marin said.
15) "Societe Generale is a victim at this stage," the prosecutor said -- noting, however, that the complex investigation was just getting under way.
16) A lawyer for a group of Societe Generale shareholders, Frederik Canoy, said they had filed a legal complaint Monday asking investigators to look into possible insider trading.
17) France's market watchdog said in a routine disclosure that a member of Societe Generale's board, Robert A. Day, sold euro85.75 million ($126.1 million) worth of shares in the bank on Jan. 9 -- two weeks before the fraud announcement and well before bank management says it discovered the problem. Day is an investment manager with U.S.-based Trust Company of the West, or TCW.
18) Two foundations linked to Day, the Robert A. Day Foundation and the Kelly Day Foundation, also sold a total of euro9.59 million ($14.1 million) worth of shares one day later, on Jan. 10, the market watchdog reported. Regulators made no allegation of wrongdoing.
19) Josh Pekarsky, a spokesman for Day, said all required government disclosures were made. Day has pledged his cooperation in any inquiries.
20) "No inside information was used in any way with respect to these sales," Pekarsky said.
21) Meanwhile, Kerviel's lawyer said he had been released Monday, but did not disclose his whereabouts. Kerviel was ordered to stay in France and not to talk to employees of Societe Generale -- except those at his bank branch.
22) "The judges understood that, in reality, he is a boy who wanted to work with the justice system, and that he has no desire to flee, contrary to what has been claimed, nor hide anything," Charriere-Bournazel told France-2 television.
23) Another lawyer for the trader, Elisabeth Meyer, called the lighter charges a "victory."
24) Under French law, filing preliminary charges means an investigating magistrate has determined there is strong evidence to suggest involvement in a crime. It gives the investigator time to pursue the probe before deciding whether to send the suspect for trial or drop the case.
25) Earlier Monday, prosecutor Marin said Kerviel had not sought to despoil the bank but wanted to be "an exceptional trader" and earn performance bonuses.
26) "It's always a bit for money, I'm not sure that was his prime motive," said the prosecutor. "It functions a bit like a drug, it's an addiction ... there's a sort of spiral you can't get out of."
27) The prosecutor said Kerviel was expecting a euro300,000 (US$441,000) bonus for 2007 -- a larger-than-usual sum for the trader but nothing near the billions the bank says it lost trying to undo his actions.
28) CEO Daniel Bouton said Societe Generale, thought by some experts to be vulnerable to a takeover, has not been approached by any suitor.
29) Bouton rejected suggestions from Kerviel's lawyers that Societe Generale was using Kerviel to hide big losses linked to the U.S. subprime mortgage crisis.
30) Meyer, one of Kerviel's defense lawyers, disputed Societe Generale's claims that her client had committed fraud, saying he was in the black with his trades as of Dec. 31.
31) Lawyer Charriere-Bournazel, said on Europe-1 radio that Kerviel was making a "profit" for the bank of euro1.5 billion ($2.2 billion) before his bets went sour. The prosecutor concurred but said the trader only "virtually" made a profit for the bank.
32) The prosecutor, based on Kerviel's account to investigators, confirmed Societe Generale's contention that the trader used other people's computer access codes, falsified documents and used other methods to cover his tracks -- helped by his previous experience in other offices at the bank that monitor traders. The bank says he bet some euro50 billion ($73.53 billion) -- more that the bank's market worth -- on European markets.
33) Societe Generale shares dropped nearly 7 percent Monday before closing down 3.8 percent at euro71.05 ($104.48) in a French market trading only slightly down.
How the Societe Generale trading scandal unfurled
(APW_ENG_20080129.0047)
1) A look at how Societe General's trading scandal occurred:
2) -- 2000: Jerome Kerviel joins Societe Generale, working in offices that monitor trades.
3) -- 2005: Kerviel promoted to more glamorous arbitrage trading desk, where his job consisted of making profits from small differences in prices between different markets.
4) -- Late 2006: Kerviel begins making transactions that the bank now says were apparent precursors to his later alleged massive fraud.
5) -- Jan. 18, 2008: Bank launches an emergency in-house investigation after Kerviel's transactions begin raising red flags.
6) -- Jan. 19: Kerviel called to Societe Generale to explain. Bank says he first doesn't provide clear explanation but then confirms that he entered fictitious trades.
7) -- Jan. 20: Bank team works overnight to identify the exposure. CEO Daniel Bouton notifies Bank of France.
8) -- Jan. 21: Bank starts quickly and quietly unwinding positions in European markets.
9) -- Jan. 23: Position closed or hedged.
10) -- Jan. 24: Societe Generale alleges the "massive" fraud cost euro4.82 billion (US$7.09 billion).
11) -- Jan. 25: Bank apologizes to shareholders in newspaper ads. Police search Kerviel's apartment.
12) -- Jan. 26: Police take Kerviel into custody.
13) -- Jan. 27: The bank says Kerviel "combined several fraudulent methods" to cover his tracks, such as falsifying documents and swiping computer access codes. It says he bet euro50 billion (US$73.8 billion) -- more than the bank's net worth -- on futures contracts at three European equity indices. His lawyers fight back, suggesting bank is making scapegoat of Kerviel to hide losses on U.S. mortgages.
14) -- Jan. 28: Prosecutor requests preliminary charges of forgery, breach of trust and fraud against Kerviel, and says Kerviel could face up to seven years if convicted. Kerviel is released from custody on condition he remain in France.
Societe Generale trader could face multiple preliminary charges of fraud, forgery
(APW_ENG_20080129.0390)
1) Investigating judges filed preliminary charges against a trader accused of causing billions of euros in losses at France's second-largest bank. He was released from custody while the thorny investigation continues.
2) The Paris prosecutor's office said it was appealing the decision Monday evening to free Jerome Kerviel, who had been held since Saturday.
3) The lighter-than-expected charges came as Paris prosecutor Jean-Claude Marin gave a glimpse for the first time of what motivated the 31-year-old futures trader: not tremendous greed but simply the adrenaline rush of trading, and perhaps the promise of a better-than-average bonus.
4) The bank and prosecutors have said Kerviel did not appear to have profited from his unauthorized dealings, and his lawyers described him as a "modest boy" who got in over his head.
5) Still, Monday's preliminary charges, filed after questioning Kerviel for 48 hours, could bring him up to three years in prison and hefty fines.
6) The preliminary charges were for "breach of trust," "forgery and using forgeries" and unauthorized computer activity, the Paris prosecutor's office said. The judges did not pursue an attempted fraud charge sought by the prosecutor's office, or even continue to hold him as the prosecutor wanted for fear he might flee, Kerviel's lawyer told reporters.
7) The banking world was stunned when Societe Generale announced a "massive fraud" last week that had cost it euro4.82 billion (US$7.09 billion). The news overshadowed the bank's substantial losses linked to the crisis in subprime mortgages.
8) Pressure on Societe Generale mounted, with stock shares faltering, an insider trading claim and questions about how the bank failed to notice a young trader's parallel trading activity -- despite alerts.
9) The Paris prosecutor said Kerviel acted alone and had begun his deception in late 2005. His speculation eventually triggered "a certain number of alerts" from the middle office, accounting or risk services, the prosecutor said. They received falsified responses from Kerviel.
10) In November 2007, Eurex "became concerned" by a position taken by Kerviel. However, Kerviel was able to wiggle out, the prosecutor said.
11) The bank would not comment on the Eurex or other "alerts."
12) Kerviel told investigators his actions were in line with what other traders did, but on a larger scale, the prosecutor said.
13) "If his positions were more massive than others, other traders acted like him, on a lesser level...," Marin said. "He considered simply that for a long time he had generated winning positions. He seemed to benefit from a certain tolerance."
14) Kerviel told investigators, "I exploded my line of credit," Marin said.
15) "Societe Generale is a victim at this stage," the prosecutor said -- noting, however, that the complex investigation was just getting under way.
16) A lawyer for a group of Societe Generale shareholders, Frederik Canoy, said they had filed a legal complaint Monday asking investigators to look into possible insider trading.
17) France's market watchdog said in a routine disclosure that a member of Societe Generale's board, Robert A. Day, sold euro85.75 million ($126.1 million) worth of shares in the bank on Jan. 9 -- two weeks before the fraud announcement and well before bank management says it discovered the problem. Day is an investment manager with U.S.-based Trust Company of the West, or TCW.
18) Two foundations linked to Day, the Robert A. Day Foundation and the Kelly Day Foundation, also sold a total of euro9.59 million ($14.1 million) worth of shares one day later, on Jan. 10, the market watchdog reported. Regulators made no allegation of wrongdoing.
19) Josh Pekarsky, a spokesman for Day, said all required government disclosures were made. Day has pledged his cooperation in any inquiries.
20) "No inside information was used in any way with respect to these sales," Pekarsky said.
21) Meanwhile, Kerviel's lawyer said he had been released Monday, but did not disclose his whereabouts. Kerviel was ordered to stay in France and not to talk to employees of Societe Generale -- except those at his bank branch.
22) "The judges understood that, in reality, he is a boy who wanted to work with the justice system, and that he has no desire to flee, contrary to what has been claimed, nor hide anything," Charriere-Bournazel told France-2 television.
23) Another lawyer for the trader, Elisabeth Meyer, called the lighter charges a "victory."
24) Under French law, filing preliminary charges means an investigating magistrate has determined there is strong evidence to suggest involvement in a crime. It gives the investigator time to pursue the probe before deciding whether to send the suspect for trial or drop the case.
25) Earlier Monday, prosecutor Marin said Kerviel had not sought to despoil the bank but wanted to be "an exceptional trader" and earn performance bonuses.
26) "It's always a bit for money, I'm not sure that was his prime motive," said the prosecutor. "It functions a bit like a drug, it's an addiction ... there's a sort of spiral you can't get out of."
27) The prosecutor said Kerviel was expecting a euro300,000 (US$441,000) bonus for 2007 -- a larger-than-usual sum for the trader but nothing near the billions the bank says it lost trying to undo his actions.
28) Bouton said Societe Generale, thought by some experts to be vulnerable to a takeover, has not been approached by any suitor.
29) Bouton rejected suggestions from Kerviel's lawyers that Societe Generale was using Kerviel to hide big losses linked to the U.S. subprime mortgage crisis.
30) Kerviel's lawyers disputed Societe Generale's claims that he committed fraud, saying he was in the black with his trades as of Dec. 31.
31) Lawyer Charriere-Bournazel, said on Europe-1 radio that Kerviel was making a "profit" for the bank of euro1.5 billion ($2.2 billion) before his bets went sour. The prosecutor concurred but said the trader only "virtually" made a profit for the bank.
32) The prosecutor, based on Kerviel's account to investigators, confirmed Societe Generale's contention that the trader used other people's computer access codes, falsified documents and used other methods to cover his tracks -- helped by his previous experience in other offices at the bank that monitor traders. The bank says he bet some euro50 billion ($73.53 billion) -- more that the bank's market worth -- on European markets.
Societe Generale says US investor who sold shares did not know about trader problem
(APW_ENG_20080129.0496)
1) Societe Generale said Tuesday that an American investor who sold euro140 million ($206 million) worth of the French bank's shares earlier this month had no inside information about suspicious trades that later cost the bank billions.
2) Societe Generale is fending off mounting questions about how it handled what it called massive fraud blamed on a single young futures trader. Jerome Kerviel was pinned with preliminary charges on Monday night.
3) A lawyer for a group of small shareholders filed a complaint into possible insider trading Monday after France's market regulator published routine stock sale declarations by board member Robert Day, an investment manager with U.S.-based Trust Company of the West, or TCW.
4) According to five declarations published Monday by the French market regulatory authority, or AMF, Day and his family's trusts and charitable foundations sold shares in Societe Generale on Jan. 9, Jan. 10 and Jan. 18 -- the day the bank says it launched an emergency in-house investigation after Kerviel's transactions begin raising red flags.
5) The value of the five share sales totals euro140 million (US$206 million). Regulators made no allegation of wrongdoing.
6) The bank, in a statement Tuesday, said Day sold the shares during a limited window when board members are authorized to sell stock.
7) "No inside information was used in any way," the statement said. "Mr. Day, like the other board members, was not advised of Mr. Kerviel's trading losses."
8) It also said Day had not been advised of additional losses linked to the crisis in subprime mortgage markets. The bank also announced euro2 billion in subprime-linked losses last week.
9) Analysts had long been predicting that Societe Generale and other French banks would report subprime-related losses for 2007.
10) Josh Pekarsky, a spokesman for Day, said all required government disclosures were made. Day has pledged his cooperation in any inquiries.
11) "No inside information was used in any way with respect to these sales," Pekarsky said.
12) Frederik Canoy, the lawyer who filed the insider trading complaint, called Day's stock sales "the visible side of the iceberg" and predicted other similar announcements would come.
Prime Minister says French government will fend off hostile takeover of Societe Generale
(APW_ENG_20080129.0541)
1) France's prime minister said his government will seek to fend off any hostile takeover of Societe Generale, the French bank under intense pressure after a trading scandal that lost it billions of euros.
2) Also Tuesday, Paris prosecutors appealed a judge's decision to free the trader at the center of the scandal, Jerome Kerviel, while he is investigated on suspected forgery and other counts.
3) And Societe Generale responded to an allegation of insider trading. It said an American investor who sold euro140 million (US$206 million) of its shares in the weeks and days before it went public last Thursday about the massive losses had no "inside information" about Kerviel's suspicious trades.
4) Societe Generale is fending off mounting questions about how it handled what it called massive fraud blamed on the 31-year-old futures trader. Analysts say the bank is vulnerable to a takeover -- speculation that the French government is doing its best to beat down.
5) "The government will not let Societe Generale become the object of hostile raids from other banks," Prime Minister Francois Fillon said, adding that it also is "very attentive" of any attempt to destabilize France's second-largest bank.
6) He indicated that new banking regulations might be needed -- after investigators have pinpointed exactly how Societe Generale's controls failed.
7) Kerviel was pinned Monday with preliminary charges of "breach of trust," "forgery and using forgeries" and unauthorized computer activity, the Paris prosecutor's office said. The judges did not pursue an attempted fraud charge sought by prosecutors, or even continue to hold him as prosecutors wanted -- in part, for fear that he might flee.
8) One of his lawyers, Elisabeth Meyer, called the lighter-than-expected charges a "victory."
9) They could, on a conviction, bring Kerviel up to three years in prison and hefty fines -- less than the maximum seven years imprisonment risked under tougher counts that the prosecutor had sought.
10) Under French law, filing preliminary charges means investigating judges have determined there is strong evidence to suggest involvement in a crime. It gives the investigators time to pursue the probe before deciding whether to send the suspect for trial or drop the case. The filing of such charges is not an indication of guilt.
11) The bank and prosecutors have said Kerviel does not appear to have profited from his unauthorized dealings, and his lawyers described him as a "modest boy" who got in over his head.
12) The banking world was stunned when Societe Generale announced last Thursday that it had lost euro4.82 billion (US$7.09 billion), and blamed Kerviel.
13) Prosecutors, based on Kerviel's account to investigators, confirmed Societe Generale's contention that the trader used other people's computer access codes, falsified documents and used other methods to cover his tracks -- helped by his previous experience in other offices at the bank that monitor traders. The bank says he bet some euro50 billion ($73.5 billion) -- more that the bank's market worth -- on European markets.
14) A lawyer for a group of small shareholders filed a complaint into possible insider trading Monday after France's market regulator published routine stock sale declarations by board member Robert Day, an investment manager with U.S.-based Trust Company of the West, or TCW.
15) According to five declarations published Monday by the regulator, Day and his family's trusts and charitable foundations sold shares in Societe Generale on Jan. 9, Jan. 10 and Jan. 18 -- the day the bank says it launched an emergency in-house investigation after Kerviel's transactions begin raising red flags.
16) The value of the five sales totals euro140 million (US$206 million). Regulators made no allegation of wrongdoing.
17) The bank, in a statement Tuesday, said Day sold the shares during a limited window when board members are authorized to sell stock.
18) "No inside information was used in any way," the statement said. "Mr. Day, like the other board members, was not advised of Mr. Kerviel's trading losses."
How the Societe Generale trading scandal unfurled
(APW_ENG_20080129.0549)
1) A look at how Societe General's trading scandal occurred:
2) -- 2000: Jerome Kerviel joins Societe Generale, working in offices that monitor trades.
3) -- 2005: Kerviel promoted to more glamorous arbitrage trading desk, where his job consisted of making profits from small differences in prices between different markets.
4) -- Jan. 18, 2008: Bank launches an emergency in-house investigation after Kerviel's transactions begin raising red flags.
5) -- Jan. 19: Kerviel called to Societe Generale to explain. Bank says he first doesn't provide clear explanation but then confirms that he entered fictitious trades.
6) -- Jan. 20: Bank team works overnight to identify the exposure. CEO Daniel Bouton notifies Bank of France.
7) -- Jan. 21: Bank starts quickly and quietly unwinding positions in European markets.
8) -- Jan. 23: Position closed or hedged.
9) -- Jan. 24: Societe Generale alleges the "massive" fraud cost euro4.82 billion (US$7.09 billion).
10) -- Jan. 25: Bank apologizes to shareholders in newspaper ads. Police search Kerviel's apartment.
11) -- Jan. 26: Police take Kerviel into custody.
12) -- Jan. 27: The bank says Kerviel "combined several fraudulent methods" to cover his tracks, such as falsifying documents and swiping computer access codes. It says he bet euro50 billion (US$73.8 billion) -- more than the bank's net worth -- on futures contracts at three European equity indices. His lawyers fight back, suggesting bank is making scapegoat of Kerviel to hide losses on U.S. mortgages.
13) -- Jan. 28: Judges file lighter-than-expected preliminary charges of breach of trust, forgery and unauthorized computer activity against Kerviel and release him from custody while the thorny investigation continues.
Elusive trader in French bank scandal gives world media the slip
(APW_ENG_20080129.0772)
1) PARIS -- "It's his ear!" a photographer shouted gleefully, reviewing pictures he snapped of a police-escorted van thought to be carrying the alleged rogue trader in the scandal shaking French bank Societe Generale.
2) If it was Jerome Kerviel's ear, that is pretty much the best glimpse anyone has gotten of the elusive 31-year-old trader, who has given the slip to media from around the world pursuing the story of history's biggest trading misadventure.
3) Kerviel shot from anonymity to international celebrity last week when Societe Generale said he was behind a "massive fraud" that had cost it euro4.82 billion (US$7.09 billion). Internet search engines now turn up hundreds of thousands of entries bearing his name.
4) Although his photograph -- a grainy mug shot culled from the bank's Web site -- made the front page of papers around the world, Kerviel has managed to remain invisible. He has not spoken a word to the press and has kept journalists guessing about his whereabouts. No fresh photos of Kerviel have been published since the scandal broke.
5) After police held him for nearly 48 hours, judges Monday filed preliminary charges against Kerviel -- and then ordered him released while the probe continues. Although hundreds of reporters were staking out the judges' offices he still managed to slip away unnoticed.
6) "It's like the Wild West, and Kerviel is an outlaw with 'Wanted' signs all over the place," said French paparazzo Pascal Rostain, one of a small army of photographers searching for Kerviel.
7) "It's enormous, every paper in the world is after his photo."
8) Within hours of the bank's announcement last Thursday, reporters and photographers had staked out his apartment in a tony Paris suburb. By Friday, they had set up camp in front of his elder brother's Paris apartment and in the Kerviel family's hometown, in the northwestern region of Brittany.
9) Photo agencies and publications that use paparazzi photos won't speculate about what a shot of Kerviel would be worth -- for fear of driving prices up. A staffer at one agency, who declined to be identified, said only that an image of Kerviel would fetch "lots and lots of money."
French market regulator opens investigation into bank Societe Generale
(APW_ENG_20080129.0914)
1) The French financial market regulator said Tuesday that it has opened an investigation into French bank Societe Generale, a spokeswoman said.
2) Christine Anglade, a spokeswoman for the Autorite des marches financiers, or AMF, gave no details on the nature of the investigation, and would not say whether it had any relation to alleged rogue trader Jerome Kerviel. The French bank said last week that his actions caused it nearly euro5 billion (US$7 billion) in losses.
French trader claims Societe Generale had to know but turned blind eye to massive risk-taking
(APW_ENG_20080129.1030)
1) Accused French rogue trader Jerome Kerviel told investigators that he believes his Societe Generale bosses were aware of his massive risk-taking on markets but turned a blind eye as long as he earned money, a judicial official said Tuesday.
2) Kerviel told investigators: "I can't believe that my superiors were not aware of the amounts that I was committing, it is impossible to generate such profits with small positions," according to excerpts of his testimony published in Le Monde newspaper. Kerviel's remarks were confirmed by Isabelle Montagne, a spokeswoman for the Paris prosecutor's office.
French trader claims Societe Generale knew but turned blind eye to massive risk-taking
(APW_ENG_20080129.1048)
1) Accused French rogue trader Jerome Kerviel told investigators that he believes his Societe Generale bosses were aware of his massive risk-taking on markets but turned a blind eye as long as he earned money, a judicial official said Tuesday.
2) Kerviel told investigators: "I can't believe that my superiors were not aware of the amounts I was committing, it is impossible to generate such profits with small positions," according to excerpts of his police testimony published in Le Monde newspaper. Kerviel's remarks were confirmed by Isabelle Montagne, a spokeswoman for the Paris prosecutor's office.
3) A lawyer for the bank accused Kerviel of lying. Societe Generale said last week that Kerviel's actions cost the bank nearly euro5 billion (US$7 billion) as it unwound his trades.
4) "When you are questioned by police or judges, you have the right to lie," lawyer Jean Veil told RTL radio. He said the bank was "a victim of someone who lied, who cheated."
5) Kerviel told investigators of efforts to mask his massive transactions, but he said his bank must nonetheless have noticed something suspicious.
6) "The techniques I used were not at all sophisticated, and any correctly conducted check should be able to detect these operations," he said, according to the testimony in Le Monde that the prosecution official confirmed.
7) Kerviel also insisted that his No. 1 concern was "earning money for my bank."
8) "As long as I was earning cash, the signs were not that worrisome," he said. "As long as you earn money and it isn't too obvious, and it's convenient, nobody says anything."
9) According to the testimony, the futures trader also told investigators that his pattern of hidden trades started in 2005 with a bet that turned profitable when markets fell because of terror attacks in London.
10) "It makes you want to continue, there's a snowball effect," he was quoted as saying.
French trader claims Societe Generale knew but turned blind eye to massive risk-taking
(APW_ENG_20080129.1140)
1) Accused French rogue trader Jerome Kerviel told investigators that he believes his Societe Generale bosses were aware of his massive risk-taking on markets but turned a blind eye as long as he earned money, a judicial official said Tuesday.
2) Societe Generale, which said last week that Kerviel's actions cost it nearly euro5 billion (US$7 billion), quickly accused Kerviel of lying. In another twist to the multifaceted case, France's financial markets authority opened an investigation into the bank, France's second-largest.
3) Kerviel, a 31-year-old junior trader, told investigators of efforts to mask his massive transactions, but he said his bank must nonetheless have noticed something suspicious, according to excerpts of his police testimony published in Le Monde newspaper. Kerviel's remarks were confirmed by Isabelle Montagne, a spokeswoman for the Paris prosecutor's office.
4) "I can't believe that my superiors were not aware of the amounts I was committing, it is impossible to generate such profits with small positions," Kerviel said, according to the account confirmed by Montagne.
5) A lawyer for Societe Generale said the bank was "a victim of someone who lied, who cheated."
6) "When you are questioned by police or judges, you have the right to lie," lawyer Jean Veil told RTL radio.
7) Kerviel said the mere fact that he only took four vacation days in 2007 should have been a glaring sign to the bank that he was unwilling to let another trader step in for him.
8) "The techniques I used were not at all sophisticated, and any correctly conducted check should be able to detect these operations," he said, according to the testimony in Le Monde that the prosecution official confirmed.
9) Kerviel also insisted that his No. 1 concern was "earning money for my bank."
10) "As long as I was earning cash, the signs were not that worrisome," he said. "As long as you earn money and it isn't too obvious, and it's convenient, nobody says anything."
11) According to the testimony, the futures trader also told investigators that his pattern of hidden trades started in 2005 with a bet that turned profitable when markets fell because of terror attacks in London.
12) "It makes you want to continue, there's a snowball effect," he was quoted as saying.
13) Meanwhile, France's market watchdog, the Autorite des Marches Financiers, or AMF, said it had opened a probe into Societe Generale.
14) Christine Anglade, a spokeswoman for the body, gave no details on the nature of the probe and would not say whether it had any relation to Kerviel. Les Echos newspaper reported that AMF has been examining the trading in the bank's shares in the days before the announcement of Kerviel's actions.
15) A lawyer for a group of Societe Generale shareholders, Frederik Canoy, has filed a legal complaint asking investigators to look into possible insider trading in connection to the case.
16) On Monday, the market watchdog said in a routine disclosure that a member of Societe Generale's board, Robert A. Day, sold euro85.75 million ($126.1 million) worth of shares in the bank on Jan. 9 -- two weeks before the fraud announcement and well before bank management says it discovered the problem. Day is an investment manager with U.S.-based Trust Company of the West, or TCW.
17) Two foundations linked to Day, the Robert A. Day Foundation and the Kelly Day Foundation, also sold a total of euro9.59 million ($14.1 million) worth of shares one day later, on Jan. 10. Regulators made no allegation of wrongdoing.
18) Josh Pekarsky, a spokesman for Day, said all required government disclosures were made, and he said no "inside information was used in any way with respect to these sales."
19) The bank's troubles have led to increased speculation that it may be the target of a takeover bid. Prime Minister Francois Fillon said his government will seek to fend off any hostile takeover.
20) Preliminary charges of "breach of trust," "forgery and using forgeries" and unauthorized computer activity were brought against Kerviel on Monday, the Paris prosecutor's office said. The judges did not pursue an attempted fraud charge sought by prosecutors.
21) One of his lawyers, Elisabeth Meyer, called the lighter-than-expected charges a "victory." Paris prosecutors appealed the decision to free Kerviel.
New twist in French bank scandal: Trader says his bosses turned blind eye
(APW_ENG_20080129.1332)
1) Terror bombs hit London, financial markets wobbled, and Jerome Kerviel was hooked.
2) The trader at the center of a massive banking scandal in France told investigators that his spiral of trades that ended in a loss of nearly euro5 billion (US$7.38 billion) for his bank, Societe Generale, started with a 2005 bet that markets would fall -- and that he was proved right after the London bombings that July.
3) More damaging for Societe Generale, Kerviel also claimed to investigators that his bosses at France's second-largest bank must have been aware of his massive risk-taking on markets but turned a blind eye as long as he earned money for the institution.
4) Kerviel was questioned by police from Saturday through Monday and then presented to judges who lodged preliminary charges of breach of trust, forgery and unauthorized computer activity against him. If tried and convicted on those charges, he faces up to three years in prison and hefty fines. Such charges mean judges have decided that further investigation is needed; they do not indicate guilt.
5) The respected daily newspaper Le Monde and a French Internet news site, MediaPart, published extracts Tuesday from Kerviel's police questioning. A spokeswoman for the Paris prosecutor's office, Isabelle Montagne, confirmed to The Associated Press that the remarks were Kerviel's.
6) "I can't believe that my superiors were not aware of the amounts I was committing, it's impossible to generate such profits with small positions, which leads me to say that when I'm in the black, my superiors close their eyes about the methods and volumes committed," he said, according to the extracts.
7) A lawyer for the bank, Jean Veil, accused Kerviel of lying, telling RTL radio: "When you are questioned by police or judges, you have the right to lie."
8) He said the bank was "a victim of someone who lied, who cheated."
9) Nevertheless, Kerviel's claims that managers looked the other way were likely to increase pressure on the bank, which has struggled to explain how its layers of checks failed to detect that Kerviel had bet euro50 billion ($73.78 billion) -- more than Societe Generale's market worth -- on European markets.
10) CEO Daniel Bouton says his offer to resign, already rejected by the board, is still on the table. He found some support Tuesday from French Finance Minister Christine Lagarde, who told senators: "I am not convinced that it is wise to change the captain when the ship lists a little."
11) Prime Minister Francois Fillon said his government will seek to fend off any hostile takeover of Societe Generale.
12) France's financial market regulator said Tuesday it has opened an investigation into Societe Generale, but did not give details. Les Echos newspaper reported that the regulator has been examining trading in the bank's shares in the days before it stunned the industry with its Jan. 24 announcement that "massive" fraud by Kerviel cost it euro4.82 billion (US$7.09 billion) as it unwound his trades.
13) According to five routine declarations published this week by the market watchdog, board member Robert Day and his family's trusts and charitable foundations sold shares in Societe Generale on Jan. 9, Jan. 10 and Jan. 18 -- the day the bank says it launched an emergency in-house investigation after Kerviel's transactions begin raising red flags.
14) The sales totaled euro140 million (US$206 million). Regulators made no allegation of wrongdoing. A lawyer for a group of Societe Generale shareholders has filed a legal complaint asking investigators to look into possible insider trading.
15) The bank, in a statement Tuesday, said Day sold the shares during a limited window when board members are authorized to sell stock.
16) "No inside information was used in any way," the statement said. "Mr. Day, like the other board members, was not advised of Mr. Kerviel's trading losses."
17) The 31-year-old junior trader told investigators of efforts to mask his massive transactions, but said his bank must nonetheless have noticed something suspicious, according to the excerpts of his police testimony confirmed by Montagne.
18) "Since I was generating cash, the signs were not that worrisome ... As long as we are winning and it isn't too obvious, and it's convenient, nobody says anything."
19) Kerviel said he had sought a 2007 bonus of euro600,000 (US$886,380), but was told by a supervisor that he couldn't expect more than a euro300,000 (US$443,190).
20) He insisted that his No. 1 concern was "earning money for my bank" -- not personal enrichment. The bank and prosecutors also say he did not appear to have pocketed money from the massive positions he built up in futures on European markets.
21) Kerviel said the mere fact that he only took four vacation days in 2007 should have been a glaring sign to the bank that he was unwilling to let another trader step in for him.
22) "The techniques I used were not at all sophisticated, and in my opinion, any correctly conducted check should be able to detect these operations," he said, according to the testimony in Le Monde.
23) The bank has acknowledged that Kerviel triggered alarms with his transactions "from time to time" but also said that he explained away the red flags as trading errors, and that his mistakes did not outnumber those of other traders.
24) But Kerviel told police that other traders and managers concealed some of their trading practices from the bank, according to MediaPart's account of his testimony, which Montagne also confirmed. Kerviel claimed that "several alerts (were) sent to my superiors" in 2007, which he said were e-mail queries about his transactions.
25) "If you are not spotted, you are not caught. If you are caught, you are hung out to dry," Kerviel said, according to the account.
26) Kerviel acknowledged that he purposely deceived his bank to hide his trades. He said he forged e-mails and used colleagues' computer log-ins. He claimed he was euro1.4 billion ($2.07 billion) in the black by the end of 2007 but didn't know how to explain the huge sum to his bosses -- so he hid it with an equal amount of fictional losses.
27) "I didn't know how to manage it. I am happy, proud of myself, but I don't know how to justify it. So I decided not to declare it to the bank," he said. "I admit to having taken big positions, which could be qualified as beyond the limits of my role, that I masked with a fictitious operation."
28) According to the testimony, Kerviel told investigators that his pattern of hidden trades started with the bet in 2005 on Allianz, apparently referring to the German insurance and banking group. He did not specify which market he bet on, or exactly when it fell. London's FTSE share index dipped in the immediate aftermath of the bomb attacks.
29) "I took a position on Allianz, betting the markets would fall. It just so happened that a little while later, the market fell after the London bombings and it's the jackpot, euro500,000," Kerviel claimed. "It makes you want to continue, there's a snowball effect."
2008-01-30
Elusive trader in French bank scandal gives world media the slip
(APW_ENG_20080130.0023)
1) PARIS -- "It's his ear!" a photographer shouted gleefully, reviewing pictures he snapped of a police-escorted van thought to be carrying the alleged rogue trader in the scandal shaking French bank Societe Generale.
2) If it was Jerome Kerviel's ear, that is pretty much the best glimpse anyone has gotten of the elusive 31-year-old trader, who has given the slip to media from around the world pursuing the story of history's biggest trading misadventure.
3) Kerviel shot from anonymity to international celebrity last week when Societe Generale said he was behind a "massive fraud" that had cost it euro4.82 billion (US$7.09 billion). Internet search engines now turn up hundreds of thousands of entries bearing his name.
4) Although his photograph -- a grainy mug shot culled from the bank's Web site -- made the front page of papers around the world, Kerviel has managed to remain invisible. He has not spoken a word to the press and has kept journalists guessing about his whereabouts. No fresh photos of Kerviel have been published since the scandal broke.
5) After police held him for nearly 48 hours, judges Monday filed preliminary charges against Kerviel -- and then ordered him released while the probe continues. Although hundreds of reporters were staking out the judges' offices he still managed to slip away unnoticed.
6) "It's like the Wild West, and Kerviel is an outlaw with 'Wanted' signs all over the place," said French paparazzo Pascal Rostain, one of a small army of photographers searching for Kerviel.
7) "It's enormous, every paper in the world is after his photo."
8) Within hours of the bank's announcement last Thursday, reporters and photographers had staked out his apartment in a tony Paris suburb. By Friday, they had set up camp in front of his elder brother's Paris apartment and in the Kerviel family's hometown, in the northwestern region of Brittany.
9) Photo agencies and publications that use paparazzi photos won't speculate about what a shot of Kerviel would be worth -- for fear of driving prices up. A staffer at one agency, who declined to be identified, said only that an image of Kerviel would fetch "lots and lots of money."
New twist in French bank scandal: Trader says his bosses turned blind eye
(APW_ENG_20080130.0034)
1) Terror bombs hit London, financial markets wobbled, and Jerome Kerviel was hooked.
2) The trader at the center of a massive banking scandal in France told investigators that his spiral of trades that ended in a loss of nearly euro5 billion (US$7.38 billion) for his bank, Societe Generale, started with a 2005 bet that markets would fall -- and that he was proved right after the London bombings that July.
3) More damaging for Societe Generale, Kerviel also claimed to investigators that his bosses at France's second-largest bank must have been aware of his massive risk-taking on markets but turned a blind eye as long as he earned money for the institution.
4) Kerviel was questioned by police from Saturday through Monday and then presented to judges who lodged preliminary charges of breach of trust, forgery and unauthorized computer activity against him. If tried and convicted on those charges, he faces up to three years in prison and hefty fines. Such charges mean judges have decided that further investigation is needed; they do not indicate guilt.
5) The respected daily newspaper Le Monde and a French Internet news site, MediaPart, published extracts Tuesday from Kerviel's police questioning. A spokeswoman for the Paris prosecutor's office, Isabelle Montagne, confirmed to The Associated Press that the remarks were Kerviel's.
6) "I can't believe that my superiors were not aware of the amounts I was committing, it's impossible to generate such profits with small positions, which leads me to say that when I'm in the black, my superiors close their eyes about the methods and volumes committed," he said, according to the extracts.
7) A lawyer for the bank, Jean Veil, accused Kerviel of lying, telling RTL radio: "When you are questioned by police or judges, you have the right to lie."
8) He said the bank was "a victim of someone who lied, who cheated."
9) Nevertheless, Kerviel's claims that managers looked the other way were likely to increase pressure on the bank, which has struggled to explain how its layers of checks failed to detect that Kerviel had bet euro50 billion ($73.78 billion) -- more than Societe Generale's market worth -- on European markets.
10) CEO Daniel Bouton says his offer to resign, already rejected by the board, is still on the table. He found some support Tuesday from French Finance Minister Christine Lagarde, who told senators: "I am not convinced that it is wise to change the captain when the ship lists a little."
11) Prime Minister Francois Fillon said his government will seek to fend off any hostile takeover of Societe Generale.
12) France's financial market regulator said Tuesday it has opened an investigation into Societe Generale, but did not give details. Les Echos newspaper reported that the regulator has been examining trading in the bank's shares in the days before it stunned the industry with its Jan. 24 announcement that "massive" fraud by Kerviel cost it euro4.82 billion (US$7.09 billion) as it unwound his trades.
13) According to five routine declarations published this week by the market watchdog, board member Robert Day and his family's trusts and charitable foundations sold shares in Societe Generale on Jan. 9, Jan. 10 and Jan. 18 -- the day the bank says it launched an emergency in-house investigation after Kerviel's transactions begin raising red flags.
14) The sales totaled euro140 million (US$206 million). Regulators made no allegation of wrongdoing. A lawyer for a group of Societe Generale shareholders has filed a legal complaint asking investigators to look into possible insider trading.
15) The bank, in a statement Tuesday, said Day sold the shares during a limited window when board members are authorized to sell stock.
16) "No inside information was used in any way," the statement said. "Mr. Day, like the other board members, was not advised of Mr. Kerviel's trading losses."
17) The 31-year-old junior trader told investigators of efforts to mask his massive transactions, but said his bank must nonetheless have noticed something suspicious, according to the excerpts of his police testimony confirmed by Montagne.
18) "Since I was generating cash, the signs were not that worrisome ... As long as we are winning and it isn't too obvious, and it's convenient, nobody says anything."
19) Kerviel said he had sought a 2007 bonus of euro600,000 (US$886,380), but was told by a supervisor that he couldn't expect more than a euro300,000 (US$443,190).
20) He insisted that his No. 1 concern was "earning money for my bank" -- not personal enrichment. The bank and prosecutors also say he did not appear to have pocketed money from the massive positions he built up in futures on European markets.
21) Kerviel said the mere fact that he only took four vacation days in 2007 should have been a glaring sign to the bank that he was unwilling to let another trader step in for him.
22) "The techniques I used were not at all sophisticated, and in my opinion, any correctly conducted check should be able to detect these operations," he said, according to the testimony in Le Monde.
23) The bank has acknowledged that Kerviel triggered alarms with his transactions "from time to time" but also said that he explained away the red flags as trading errors, and that his mistakes did not outnumber those of other traders.
24) But Kerviel told police that other traders and managers concealed some of their trading practices from the bank, according to MediaPart's account of his testimony, which Montagne also confirmed. Kerviel claimed that "several alerts (were) sent to my superiors" in 2007, which he said were e-mail queries about his transactions.
25) "If you are not spotted, you are not caught. If you are caught, you are hung out to dry," Kerviel said, according to the account.
26) Kerviel acknowledged that he purposely deceived his bank to hide his trades. He said he forged e-mails and used colleagues' computer log-ins. He claimed he was euro1.4 billion ($2.07 billion) in the black by the end of 2007 but didn't know how to explain the huge sum to his bosses -- so he hid it with an equal amount of fictional losses.
27) "I didn't know how to manage it. I am happy, proud of myself, but I don't know how to justify it. So I decided not to declare it to the bank," he said. "I admit to having taken big positions, which could be qualified as beyond the limits of my role, that I masked with a fictitious operation."
28) According to the testimony, Kerviel told investigators that his pattern of hidden trades started with the bet in 2005 on Allianz, apparently referring to the German insurance and banking group. He did not specify which market he bet on, or exactly when it fell. London's FTSE share index dipped in the immediate aftermath of the bomb attacks.
29) "I took a position on Allianz, betting the markets would fall. It just so happened that a little while later, the market fell after the London bombings and it's the jackpot, euro500,000," Kerviel claimed. "It makes you want to continue, there's a snowball effect."
Societe Generale board meeting amid new accusations, complaints about trading crisis
(APW_ENG_20080130.0459)
1) The board of scandal-marred French bank Societe Generale met Wednesday as its top executive is under intense pressure over the loss of billions of euros blamed on a rogue trader.
2) Chief Executive Daniel Bouton says his offer to resign, first made as the trading crisis unfolded last week, remains on the table -- a proposal likely to be discussed by the board.
3) The bank's management also must cope with new accusations by the trader, 31-year-old Jerome Kerviel, who told investigators that his bosses turned a blind eye to his questionable trades as long as he brought in money for the bank.
4) Patrick Ollier, the conservative head of the National Assembly's economic affairs committee, said on French radio Wednesday morning that Bouton's "days as CEO are numbered" and that management must change.
5) "But there is a period in which the boss must remain," Ollier said on RTL radio.
6) Amid concerns that a gem of France's banking industry is in jeopardy and vulnerable, Prime Minister Francois Fillon said Tuesday his government will seek to block any hostile bid for the bank.
7) The head of the Bank of France was to be questioned by the Senate on Wednesday amid increasing questions about oversight of French banking system.
8) Pressure intensified Tuesday with the publication in two French media outlets of a transcript of investigators' questioning of Kerviel, whose spiral of trades ended in a loss of nearly euro5 billion (US$7.38 billion) for Societe Generale.
9) Kerviel was questioned by police from Saturday through Monday and then presented to judges who lodged preliminary charges of breach of trust, forgery and unauthorized computer activity against him. If tried and convicted on those charges, he faces up to three years in prison and hefty fines. Such charges mean judges have decided that further investigation is needed; they do not indicate guilt.
10) Respected newspaper Le Monde and a French Internet news site, MediaPart, published extracts Tuesday from the police questioning of Kerviel. A spokeswoman for the Paris prosecutor's office confirmed to the Associated Press that the remarks were Kerviel's.
11) "I can't believe that my superiors were not aware of the amounts I was committing, it's impossible to generate such profits with small positions, which leads me to say that when I'm in the black, my superiors close their eyes about the methods and volumes committed," he said, according to the extracts.
12) A lawyer for the bank, Jean Veil, accused Kerviel of lying.
13) He insisted that his No. 1 concern was "earning money for my bank" -- not personal enrichment. The bank and prosecutors also say he did not appear to have pocketed money from the massive positions he built up betting on futures in European equity markets.
14) The bank has acknowledged that Kerviel triggered alarms with his transactions "from time to time" but also said that he explained away the red flags as trading errors, and that his mistakes did not outnumber those of other traders.
15) But Kerviel told police that other traders and managers concealed some of their trading practices. He claimed that "several alerts (were) sent to my superiors" in 2007, in the form of e-mail queries about his transactions.
16) Kerviel acknowledged he purposely deceived his bank to hide his trades, according to the extracts. He said he forged e-mails and used colleagues' computer log-ins. He claimed he was euro1.4 billion ($2.07 billion) in the black by the end of 2007 but didn't know how to explain the huge sum to his bosses -- so he hid it with an equal amount of fictional losses.
17) Also Tuesday, France's financial market regulator said it has opened a probe into Societe Generale, but did not give details.
18) Les Echos newspaper reported that the regulator has been examining trading in the bank's shares in the days before it stunned the market with its Jan. 24 announcement that fraud by Kerviel cost it euro4.82 billion (US$7.09 billion) as it unwound his trades.
19) According to five routine declarations published this week by market watchdog AMF, Societe Generale board member Robert Day and his family's trusts and foundations sold shares in Societe Generale on Jan. 9, Jan. 10 and Jan. 18. The sales totaled euro140 million (US$206 million).
20) Regulators made no allegation of wrongdoing. A lawyer for a group of Societe Generale shareholders has filed a legal complaint asking investigators to look into possible insider trading.
21) The bank said Tuesday that Day had not been advised of Kerviel's trading losses and that "no inside information was used in any way."
Societe Generale board meeting amid new accusations, complaints about trading crisis
(APW_ENG_20080130.0606)
1) The board of French bank Societe Generale met Wednesday with its top executive under intense pressure over the loss of euro4.82 billion (US$7.09 billion) blamed on a rogue trader.
2) Bank employees were also to convene later in the day, amid fears about the future of one of Europe's most respected banks. French lawmakers, meanwhile, were to question regulators about how Societe Generale could have gotten in such a tangle.
3) The bank's management must cope with accusations by the trader, 31-year-old Jerome Kerviel, who told investigators that his bosses turned a blind eye to his questionable trades as long as he brought in money for the bank.
4) Chief Executive Daniel Bouton says his offer to resign, first made as the trading crisis unfolded last week, remains on the table.
5) Patrick Ollier, the conservative head of the National Assembly's economic affairs committee, said on French radio Wednesday morning that Bouton's "days as CEO are numbered" and that management must change.
6) Several hundred bank employees poured out of its headquarters to defend Bouton in an impromptu demonstration during the morning board meeting, saying his departure would only make things worse.
7) A top French union official, meanwhile, said ushering Bouton out quickly would only be a surface solution to a deeper problem.
8) "We have here a very serious affair that calls into question the entire banking system," said Bernard Thibault, head of the CGT union, said on LCI television. "It's not enough to change a manager to change ... the way the financial and banking system are to such a degree disconnected from the real economy."
9) Amid concerns that a gem of France's banking industry is in jeopardy and vulnerable, Prime Minister Francois Fillon said Tuesday his government will seek to block any hostile bid for the bank.
10) Such a prospect raised eyebrows in Brussels, where the EU internal markets commissioner cautioned France on Wednesday to treat potential bidders for Societe Generale equally and without regard to national interests.
11) "The same rules apply as in other takeover situations under free movement of capital rules. Potential bidders are to be treated in an undiscriminatory manner," Charlie McCreevy said in a statement through his spokesman.
12) After the board meeting, the employee council was to meet in the afternoon.
13) "We are all worried about the future of the bank and our jobs," said Francois Thibault, a 24-year-old who works in the sales department and took part in the demonstration supporting CEO Bouton.
14) "He is the man to deal with the situation. in the medium term it is he who can help us," said Thibault.
15) Also in the afternoon, the Senate was to question the head of the Bank of France, and the head of the AMF, the financial market watchdog, about oversight of French banking system.
16) Pressure intensified Tuesday with the publication in two French media outlets of a transcript of investigators' questioning of Kerviel, whose trades ended in a loss of nearly euro5 billion (US$7.38 billion) for Societe Generale.
17) Kerviel was questioned by police from Saturday through Monday and then presented to judges who lodged preliminary charges of breach of trust, forgery and unauthorized computer activity against him. If tried and convicted on those charges, he faces up to three years in prison and heavy fines. Such charges mean judges have decided that further investigation is needed; they do not indicate guilt.
18) Respected newspaper Le Monde and a French Internet news site, MediaPart, published extracts Tuesday from the police questioning of Kerviel. A spokeswoman for the Paris prosecutor's office confirmed to the Associated Press that the remarks were Kerviel's.
19) "I can't believe that my superiors were not aware of the amounts I was committing, it's impossible to generate such profits with small positions, which leads me to say that when I'm in the black, my superiors close their eyes about the methods and volumes committed," he said, according to the extracts.
20) A lawyer for the bank, Jean Veil, accused Kerviel of lying.
21) Kerviel insisted that his No. 1 concern was "earning money for my bank" -- not personal enrichment. The bank and prosecutors also say he did not appear to have pocketed money from the massive positions he built up betting on futures in European equity markets.
22) The bank has acknowledged that Kerviel triggered alarms with his transactions "from time to time" but also said that he explained away the red flags as trading errors, and that his mistakes did not outnumber those of other traders.
23) But Kerviel told police that other traders and managers concealed some of their trading practices.
24) Also Tuesday, France's financial market regulator said it has opened a probe into Societe Generale, but did not give details.
25) Les Echos newspaper reported that the regulator has been examining trading in the bank's shares in the days before it stunned the market with its Jan. 24 announcement that fraud by Kerviel cost it euro4.82 billion (US$7.09 billion) as it unwound his trades.
26) According to five routine declarations published this week by market watchdog AMF, Societe Generale board member Robert Day and his family's trusts and foundations sold shares in Societe Generale on Jan. 9, Jan. 10 and Jan. 18. The sales totaled euro140 million (US$206 million).
27) Regulators made no allegation of wrongdoing. A lawyer for a group of Societe Generale shareholders has filed a legal complaint asking investigators to look into possible insider trading.
28) The bank said Tuesday that Day had not been advised of Kerviel's trading losses and that "no inside information was used in any way."
French bank Societe Generale ' s board keeps CEO, orders probe of trading losses
(APW_ENG_20080130.0862)
1) French bank Societe Generale's board of directors decided Wednesday to keep Chairman and CEO Daniel Bouton, despite mounting pressure for him to resign over huge trading losses, a spokeswoman said.
2) The board unanimously asked Bouton and co-chief executive officer Philippe Citerne to continue in their posts, spokeswoman Laura Schalk said.
3) The board "confirms its confidence" in Bouton and Citerne, independent board member Jean-Martin Folz told reporters outside the company headquarters.
4) Folz, former CEO of PSA Peugeot Citroen, was named to head an independent committee that the Societe Generale board is setting up to investigate billions of euros (dollars) in losses that the bank blamed on a single trader.
5) The committee has asked auditing firm PricewaterhouseCoopers to help in the probe, the bank said in a statement. It will examine the causes and sizes of the trading losses and look into whether the bank accurately communicated information about the scandal.
6) The statement gave no timetable for the committee's report.
7) Bouton offered to resign as the trading crisis unfolded last week and the bank said it had lost euro4.82 billion (US$7.09 billion) in unwinding Kerviel's trades.
8) Bouton said before the meeting that the offer remains on the table.
9) Several hundred bank employees poured out of its headquarters to defend Bouton in an impromptu demonstration during the board meeting, saying his departure would only make things worse.
10) The board meeting was to be followed by a gathering of bank employees, worried about their jobs and the fate of one of Europe's most respected banks.
11) Meanwhile, the French Senate began hearings Wednesday of the head of financial market regulator AMF and the director of the Bank of France, about how Societe Generale could have gotten in such a tangle.
12) The bank's management is also facing new accusations by the trader, 31-year-old Jerome Kerviel, who told investigators that his bosses turned a blind eye to his questionable trades as long as he brought in money for the bank.
13) Amid concerns that a gem of France's banking industry is in jeopardy and vulnerable, Prime Minister Francois Fillon said Tuesday his government will seek to block any hostile bid for the bank.
14) Government spokesman Laurent Wauquiez said Wednesday, "If at some point there needs to be extra financial support for Societe Generale, it must be done as much as possible in the interests of the French banking industry."
15) Such prospects raised eyebrows in Brussels, where the EU internal markets commissioner cautioned France on Wednesday to treat potential bidders for Societe Generale equally and without regard to national interests.
16) "The same rules apply as in other takeover situations under free movement of capital rules. Potential bidders are to be treated in an undiscriminatory manner," Charlie McCreevy said in a statement through his spokesman.
17) Analysts are also speculating about the dismantling of Societe Generale, with its units being divided up among other leading banks.
18) Analysts say France's largest bank and Societe Generale's chief competitor, BNP Paribas, would be the most likely buyer of all or part of the struggling bank. Other names mentioned include French rival Credit Agricole, Britain's HSBC Holdings, Germany's Deutsche Bank AG, Spain's Banco Santander SA and Italy's UniCredit SpA.
19) BNP chief financial officer Philippe Bordenave, speaking as the bank announced a drop in fourth-quarter profits for 2007 on Wednesday, refused to comment on Societe Generale's future.
French bank Societe Generale ' s board keeps CEO, orders probe of trading losses
(APW_ENG_20080130.1104)
1) French bank Societe Generale kept its embattled CEO and promised a thorough probe of huge trading losses blamed on a single trader, while the country's central bank chief on Wednesday questioned why "malfunctions" at the company went ignored.
2) The board unanimously asked Chief Executive Daniel Bouton and co-chief executive officer Philippe Citerne to continue in their posts, and "confirms its confidence" in them, board member Jean-Martin Folz told reporters afterward.
3) Folz, former CEO of PSA Peugeot Citroen, was named to head a committee that the Societe Generale board is setting up to investigate billions of euros (dollars) in losses that the bank announced last week, stunning an already shaky banking world.
4) The committee has asked auditing firm PricewaterhouseCoopers to help in the probe, the bank said in a statement. It will examine the causes and sizes of the trading losses and look into whether the bank accurately communicated information about the scandal.
5) The statement gave no timetable for the committee's report.
6) Bouton offered to resign as the trading crisis unfolded last week and the bank said it had lost euro4.82 billion (US$7.09 billion) in unwinding trades by 31-year-old futures trader Jerome Kerviel. The board refused his offer.
7) Questions have mounted about how Kerviel could have been allowed to fool his superiors, and how the bank handled the discovery of Kerviel's unauthorized transactions.
8) "We must focus on the reasons why the anomalies, the malfunctions, were not spotted, analyzed, or passed upward to a high-enough level, dealt with and followed up .... That is going to be at the heart of our investigation," Bank of France chief Christian Noyer said at a hearing before the French Senate.
9) The trader told investigators that his bosses turned a blind eye to his questionable deals as long as he brought in money for the bank, according to excerpts published by two media organizations Tuesday. The bank's lawyer said he was lying.
10) Noyer was questioned in the Senate along with the head of France's financial market regulator, Michel Prada.
11) Prada said the market watchdog left it up to Bouton to undo his trades and that he "acted well."
12) He said the watchdog did not authorize or intervene in the bank's decision to unwind its positions. "We simply said that we would apply the law to allow him to handle a major problem in an extraordinarily short time, three days," he said.
13) The board meeting was followed by a gathering of bank employees, worried about their jobs and the fate of one of Europe's most respected banks.
14) Several hundred bank employees defended Bouton in an impromptu demonstration Wednesday, saying his departure would only make things worse.
15) Amid concerns that a gem of France's banking industry is in jeopardy and vulnerable, Prime Minister Francois Fillon has said his government will seek to block any hostile bid for the bank.
16) Such prospects raised eyebrows in Brussels, where the EU internal markets commissioner cautioned France on Wednesday to treat potential bidders for Societe Generale equally and without regard to national interests.
17) "The same rules apply as in other takeover situations under free movement of capital rules. Potential bidders are to be treated in an undiscriminatory manner," Charlie McCreevy said in a statement through his spokesman.
18) Analysts are also speculating about the dismantling of Societe Generale, with its units being divided up among other leading banks.
19) Analysts say France's largest bank and Societe Generale's chief competitor, BNP Paribas, would be the most likely buyer of all or part of the struggling bank. Other names mentioned include French rival Credit Agricole, Britain's HSBC Holdings, Germany's Deutsche Bank AG, Spain's Banco Santander SA and Italy's UniCredit SpA.
20) BNP chief financial officer Philippe Bordenave, speaking as the bank announced a drop in fourth-quarter profits for 2007 on Wednesday, refused to comment on Societe Generale's future.
21) Despite the disappointing results, Celent analyst Axel Pierron said the bank's relatively limited exposure to the subprime market and its strategy of diversification were some good news out of the BNP report.
22) Pierron said that results could drive a fresh round of market speculation that BNP may be mulling an acquisition of Societe Generale.
23) Shares of Societe Generale were up more than 5 percent Wednesday afternoon at euro82.51 ($121.89) on the Paris stock exchange. The stock, which has lost half its value since the middle of last year, has bobbed up and down since the announcement of the trading loss Jan. 24.
French bank Societe Generale ' s board keeps CEO, orders probe of trading losses
(APW_ENG_20080130.1276)
1) French bank Societe Generale kept its embattled CEO and promised a thorough probe of huge trading losses blamed on a single trader, while the country's central bank chief on Wednesday questioned why "malfunctions" at the company went ignored.
2) The board unanimously asked Chief Executive Daniel Bouton and co-chief executive officer Philippe Citerne to continue in their posts, and "confirms its confidence" in them, board member Jean-Martin Folz told reporters afterward.
3) Folz, former CEO of PSA Peugeot Citroen, was named to head a committee that the Societe Generale board is setting up to investigate billions of euros (dollars) in losses that the bank announced last week, stunning an already shaky banking world.
4) The committee has asked auditing firm PricewaterhouseCoopers to help in the probe, the bank said in a statement. It will examine the causes and sizes of the trading losses and look into whether the bank accurately communicated information about the scandal.
5) The statement gave no timetable for the committee's report.
6) Bouton offered to resign as the trading crisis unfolded last week and the bank said it had lost euro4.82 billion (US$7.09 billion) in unwinding trades by 31-year-old futures trader Jerome Kerviel. The board refused his offer.
7) Questions have mounted about how Kerviel could have been allowed to fool his superiors, and how the bank handled the discovery of Kerviel's unauthorized transactions.
8) "We must focus on the reasons why the anomalies, the malfunctions, were not spotted, analyzed, or passed upward to a high-enough level, dealt with and followed up .... That is going to be at the heart of our investigation," Bank of France chief Christian Noyer said at a hearing before the French Senate.
9) The trader told investigators that his bosses turned a blind eye to his questionable deals as long as he brought in money for the bank, according to excerpts published by two media organizations Tuesday. The bank's lawyer said he was lying.
10) Noyer was questioned in the Senate along with the head of France's financial market regulator, Michel Prada.
11) Prada said the market watchdog left it up to Bouton to undo his trades and that he "acted well."
12) He said the watchdog did not authorize or intervene in the bank's decision to unwind its positions. "We simply said that we would apply the law to allow him to handle a major problem in an extraordinarily short time, three days," he said.
13) The board meeting was followed by a gathering of bank employees, worried about their jobs and the fate of one of Europe's most respected banks.
14) Several hundred bank employees defended Bouton in an impromptu demonstration Wednesday, saying his departure would only make things worse.
15) Despite rumors that a gem of France's banking industry is vulnerable to takeover, "The subject was not raised" at the board meeting, bank spokeswoman Laura Schalk said.
16) Amid concerns that a gem of France's banking industry is in jeopardy and vulnerable, Prime Minister Francois Fillon has said his government will seek to block any hostile bid for the bank.
17) Such prospects raised eyebrows in Brussels, where the EU internal markets commissioner cautioned France on Wednesday to treat potential bidders for Societe Generale equally and without regard to national interests.
18) "The same rules apply as in other takeover situations under free movement of capital rules. Potential bidders are to be treated in an undiscriminatory manner," Charlie McCreevy said in a statement through his spokesman.
19) Analysts are also speculating about the dismantling of Societe Generale, with its units being divided up among other leading banks.
20) Analysts say France's largest bank and Societe Generale's chief competitor, BNP Paribas, would be the most likely buyer of all or part of the struggling bank. Other names mentioned include French rival Credit Agricole, Britain's HSBC Holdings, Germany's Deutsche Bank AG, Spain's Banco Santander SA and Italy's UniCredit SpA.
21) BNP chief financial officer Philippe Bordenave, speaking as the bank announced a drop in fourth-quarter profits for 2007 on Wednesday, refused to comment on Societe Generale's future.
22) Despite the disappointing results, Celent analyst Axel Pierron said the bank's relatively limited exposure to the subprime market and its strategy of diversification were some good news out of the BNP report.
23) Pierron said that results could drive a fresh round of market speculation that BNP may be mulling an acquisition of Societe Generale.
24) Shares of Societe Generale were up more than 5 percent Wednesday afternoon at euro82.51 ($121.89) on the Paris stock exchange. The stock, which has lost half its value since the middle of last year, has bobbed up and down since the announcement of the trading loss Jan. 24.
25) Meanwhile, French radio and television reported that police searched the Paris apartment of Kerviel's older brother, Olivier Kerviel. Jerome Kerviel was released from police custody on Monday but barred from leaving France, and his whereabouts were unknown.
French bank Societe Generale ' s board keeps CEO, orders probe of trading losses
(APW_ENG_20080130.1333)
1) Societe Generale's CEO is keeping his job, facing down -- at least for now -- mounting pressure for his resignation over a trading scandal that cost the bank billions.
2) The board on Wednesday rebuffed calls by French President Nicolas Sarkozy for top executives to face the "consequences" of the huge losses which resulted from unauthorized trading, giving Daniel Bouton and co-chief executive officer Philippe Citerne their universal backing at a meeting.
3) But the head of the nation's central bank said controls under Bouton's watch were lacking and questioned why "malfunctions" at Societe Generale were ignored.
4) Bouton offered to resign as the trading crisis unfolded last week and the bank said it had lost euro4.82 billion (US$7.09 billion) in unwinding trades by 31-year-old futures trader Jerome Kerviel. The board refused his offer.
5) Questions have mounted about how Kerviel could have fooled his superiors, and how the bank handled the discovery of Kerviel's unauthorized transactions.
6) The bank's controls "didn't function like they should have" and "were not followed up appropriately," Bank of France chief Christian Noyer said at a hearing before the French Senate, reporting on initial investigations conducted last week.
7) "We must focus on the reasons why the anomalies, the malfunctions, were not spotted, analyzed, or passed upward to a high-enough level, dealt with and followed up," he said.
8) The trader told investigators that he believes his bosses turned a blind eye to his questionable deals as long as he brought in money for the bank, according to excerpts published Tuesday by two media outlets that were verified by a prosecution official. The bank's lawyer said Kerviel was lying.
9) Noyer was questioned in the Senate along with the head of France's financial market regulator, Michel Prada.
10) Both men said they approved Bouton's decision to secretly unwind Kerviel's positions over three days before disclosing last Thursday the record losses that require the bank to seek an extra euro5.5 billion (US$8.15 billion) in new capital.
11) Prada said Bouton "acted well," and shareholders "were protected from what could have been a major crisis."
12) The French Financial Market Authority, the AMF, will investigate stock movements to ensure there was no insider trading while the information was kept out of the public domain. A lawyer for a group of Societe Generale shareholders said they had filed a legal complaint Monday asking investigators to look into possible insider trading.
13) Societe Generale also announced it is setting up a committee to investigate what went wrong, with the help of auditing firm PricewaterhouseCoopers.
14) The committee will examine the causes and sizes of the trading losses and look into whether the bank accurately communicated information about the scandal.
15) While board members were meeting, bank employees worried about their jobs and the fate of one of Europe's most respected banks began streaming out of the Societe Generale's headquarters in Paris' business district in a spontaneous demonstration of support for Bouton.
16) "We are totally in solidarity with the president," said Philippe le Blanc, 42, who has worked for the bank for seven years.
17) Headhunters, preying on employee fears about their bonuses following the loss, are looking to poach the shaken French bank's staff.
18) Jean-Pierre Mustier, head of the bank's corporate and investment banking arm, has said the bank will pay staff to retain them amid the crisis.
19) Bouton and Citerne have said they won't receive bonuses or stock options for 2007 and will forgo salaries for the first half of this year.
20) Analysts are also speculating about the dismantling of Societe Generale, with its units being divided up among other leading banks.
21) Prime Minister Francois Fillon has said his government will seek to block any hostile bid for the bank, raising eyebrows among EU competition authorities in Brussels, which cautioned France on Wednesday to treat potential bidders without regard to national interests.
22) SocGen spokeswoman Laura Schalk said there was no discussion at Wednesday's board meeting of a friendly takeover offer for the bank.
23) Analysts say France's largest bank and Societe Generale's chief competitor, BNP Paribas, would be the most likely buyer of all or part of the struggling bank. Other names mentioned include French rival Credit Agricole, Britain's HSBC Holdings, Germany's Deutsche Bank AG, Spain's Banco Santander SA and Italy's UniCredit SpA.
24) BNP chief financial officer Philippe Bordenave, speaking as the bank announced a drop in fourth-quarter profits for 2007 on Wednesday, refused to comment on Societe Generale's future.
25) Shares of Societe Generale closed up 4.3 percent Wednesday afternoon at euro81.8 (US$121.15) on the Paris stock exchange. The stock, which has lost half its value since the middle of last year, has bobbed up and down since the announcement of the trading loss Jan. 24.
26) Meanwhile, French radio and television reported that police searched the Paris apartment of Kerviel's older brother, Olivier Kerviel. Jerome Kerviel was released from police custody on Monday but barred from leaving France, and his whereabouts were unknown.
French bank Societe Generale ' s board keeps CEO, orders probe of trading losses
(APW_ENG_20080130.1377)
1) Societe Generale's CEO is keeping his job, facing down -- at least for now -- mounting pressure for his resignation over a trading scandal that cost the bank billions.
2) The board on Wednesday rebuffed calls by French President Nicolas Sarkozy for top executives to face the "consequences" of the huge losses which resulted from unauthorized trading, giving Daniel Bouton and co-chief executive officer Philippe Citerne their universal backing at a meeting.
3) But the head of the nation's central bank said controls under Bouton's watch were lacking and questioned why "malfunctions" at Societe Generale were ignored.
4) Bouton offered to resign as the trading crisis unfolded last week and the bank said it had lost euro4.82 billion (US$7.09 billion) in unwinding trades by 31-year-old futures trader Jerome Kerviel. The board refused his offer.
5) "The board asked me to stay at the helm of the ship in the storm we are in," Bouton told France-2 television. "I am a man of duty. I am not going to jump overboard when the board asks me to stay and do my duty."
6) Questions have mounted about how Kerviel could have fooled his superiors, and how the bank handled the discovery of Kerviel's unauthorized transactions.
7) The bank's controls "didn't function like they should have" and "were not followed up appropriately," Bank of France chief Christian Noyer said at a hearing before the French Senate, reporting on initial investigations conducted last week.
8) "We must focus on the reasons why the anomalies, the malfunctions, were not spotted, analyzed, or passed upward to a high-enough level, dealt with and followed up," he said.
9) The trader told investigators that he believes his bosses turned a blind eye to his questionable deals as long as he brought in money for the bank, according to excerpts published Tuesday by two media outlets that were verified by a prosecution official.
10) The bank's lawyer said Kerviel was lying, and its CEO insisted that the bank's role was "to divide our risks ... never to expose ourselves to speculation of this type."
11) Bouton asked, "Why did (Kerviel) think he was in another world, the world of big speculative finance? That's not Societe Generale. We're about our clients."
12) The Bank of France chief was questioned in the Senate along with the head of France's financial market regulator, Michel Prada.
13) Both men said they approved Bouton's decision to secretly unwind Kerviel's positions over three days before disclosing last Thursday the record losses that require the bank to seek an extra euro5.5 billion (US$8.15 billion) in new capital.
14) Prada said Bouton "acted well," and shareholders "were protected from what could have been a major crisis."
15) The French Financial Market Authority, the AMF, will investigate stock movements to ensure there was no insider trading while the information was kept out of the public domain. A lawyer for a group of Societe Generale shareholders said they had filed a legal complaint Monday asking investigators to look into possible insider trading.
16) Societe Generale also announced it is setting up a committee to investigate what went wrong, with the help of auditing firm PricewaterhouseCoopers.
17) The committee will examine the causes and sizes of the trading losses and look into whether the bank accurately communicated information about the scandal.
18) While board members were meeting, bank employees worried about their jobs and the fate of one of Europe's most respected banks began streaming out of the Societe Generale's headquarters in Paris' business district in a spontaneous demonstration of support for Bouton.
19) "We are totally in solidarity with the president," said Philippe le Blanc, 42, who has worked for the bank for seven years.
20) Headhunters, preying on employee fears about their bonuses following the loss, are looking to poach the shaken French bank's staff.
21) Jean-Pierre Mustier, head of the bank's corporate and investment banking arm, has said the bank will pay staff to retain them amid the crisis.
22) Bouton and Citerne have said they won't receive bonuses or stock options for 2007 and will forgo salaries for the first half of this year.
23) Analysts are also speculating about the dismantling of Societe Generale, with its units being divided up among other leading banks.
24) Prime Minister Francois Fillon has said his government will seek to block any hostile bid for the bank, raising eyebrows among EU competition authorities in Brussels, which cautioned France on Wednesday to treat potential bidders without regard to national interests.
25) SocGen spokeswoman Laura Schalk said there was no discussion at Wednesday's board meeting of a friendly takeover offer for the bank.
26) Analysts say France's largest bank and Societe Generale's chief competitor, BNP Paribas, would be the most likely buyer of all or part of the struggling bank. Other names mentioned include French rival Credit Agricole, Britain's HSBC Holdings, Germany's Deutsche Bank AG, Spain's Banco Santander SA and Italy's UniCredit SpA.
27) BNP chief financial officer Philippe Bordenave, speaking as the bank announced a drop in fourth-quarter profits for 2007 on Wednesday, refused to comment on Societe Generale's future.
28) Shares of Societe Generale closed up 4.3 percent Wednesday afternoon at euro81.8 (US$121.15) on the Paris stock exchange. The stock, which has lost half its value since the middle of last year, has bobbed up and down since the announcement of the trading loss Jan. 24.
29) Meanwhile, French radio and television reported that police searched the Paris apartment of Kerviel's older brother, Olivier Kerviel. Jerome Kerviel was released from police custody on Monday but barred from leaving France, and his whereabouts were unknown.
French bank Societe Generale ' s board keeps CEO, orders probe of trading losses
(APW_ENG_20080130.1400)
1) Societe Generale's CEO is keeping his job, facing down -- at least for now -- mounting pressure for his resignation over a trading scandal that cost the bank billions.
2) The board on Wednesday rebuffed calls by French President Nicolas Sarkozy for top executives to face the "consequences" of the huge losses which resulted from unauthorized trading, giving Daniel Bouton and co-chief executive officer Philippe Citerne their universal backing at a meeting.
3) But the head of the nation's central bank said controls under Bouton's watch were lacking and questioned why "malfunctions" at Societe Generale were ignored.
4) Bouton offered to resign as the trading crisis unfolded last week and the bank said it had lost euro4.82 billion (US$7.09 billion) in unwinding trades by 31-year-old futures trader Jerome Kerviel. The board refused his offer.
5) "The board asked me to stay at the helm of the ship in the storm we are in," Bouton told France-2 television. "I am a man of duty. I am not going to jump overboard when the board asks me to stay and do my duty."
6) Questions have mounted about how Kerviel could have fooled his superiors, and how the bank handled the discovery of Kerviel's unauthorized transactions.
7) The bank's controls "didn't function like they should have" and "were not followed up appropriately," Bank of France chief Christian Noyer said at a hearing before the French Senate, reporting on initial investigations conducted last week.
8) "We must focus on the reasons why the anomalies, the malfunctions, were not spotted, analyzed, or passed upward to a high-enough level, dealt with and followed up," he said.
9) The trader told investigators that he believes his bosses turned a blind eye to his questionable deals as long as he brought in money for the bank, according to excerpts published Tuesday by two media outlets that were verified by a prosecution official.
10) The bank's lawyer said Kerviel was lying, and its CEO insisted that the bank's role was "to divide our risks ... never to expose ourselves to speculation of this type."
11) Bouton asked, "Why did (Kerviel) think he was in another world, the world of big speculative finance? That's not Societe Generale. We're about our clients."
12) The Bank of France chief was questioned in the Senate along with the head of France's financial market regulator, Michel Prada.
13) Both men said they approved Bouton's decision to secretly unwind Kerviel's positions over three days before disclosing last Thursday the record losses that require the bank to seek an extra euro5.5 billion (US$8.15 billion) in new capital.
14) Prada said Bouton "acted well," and shareholders "were protected from what could have been a major crisis."
15) The French Financial Market Authority, the AMF, will investigate stock movements to ensure there was no insider trading while the information was kept out of the public domain. A lawyer for a group of Societe Generale shareholders said they had filed a legal complaint Monday asking investigators to look into possible insider trading.
16) Societe Generale also announced it is setting up a committee to investigate what went wrong, with the help of auditing firm PricewaterhouseCoopers.
17) The committee will examine the causes and sizes of the trading losses and look into whether the bank accurately communicated information about the scandal.
18) While board members were meeting, bank employees worried about their jobs and the fate of one of Europe's most respected banks began streaming out of the Societe Generale's headquarters in Paris' business district in a spontaneous demonstration of support for Bouton.
19) "We are totally in solidarity with the president," said Philippe le Blanc, 42, who has worked for the bank for seven years.
20) Headhunters, preying on employee fears about their bonuses following the loss, are looking to poach the shaken French bank's staff.
21) Jean-Pierre Mustier, head of the bank's corporate and investment banking arm, has said the bank will pay staff to retain them amid the crisis.
22) Bouton and Citerne have said they won't receive bonuses or stock options for 2007 and will forgo salaries for the first half of this year.
23) Analysts are also speculating about the dismantling of Societe Generale, with its units being divided up among other leading banks.
24) Prime Minister Francois Fillon has said his government will seek to block any hostile bid for the bank, raising eyebrows among EU competition authorities in Brussels, which cautioned France on Wednesday to treat potential bidders without regard to national interests.
25) SocGen spokeswoman Laura Schalk said there was no discussion at Wednesday's board meeting of a friendly takeover offer for the bank. Bouton said it would be "strictly no problem" for the bank to remain independent because it is still profitable.
26) Analysts say France's largest bank and Societe Generale's chief competitor, BNP Paribas, would be the most likely buyer of all or part of the struggling bank. Other names mentioned include French rival Credit Agricole, Britain's HSBC Holdings, Germany's Deutsche Bank AG, Spain's Banco Santander SA and Italy's UniCredit SpA.
27) BNP chief financial officer Philippe Bordenave, speaking as the bank announced a drop in fourth-quarter profits for 2007 on Wednesday, refused to comment on Societe Generale's future.
28) Shares of Societe Generale closed up 4.3 percent Wednesday afternoon at euro81.8 (US$121.15) on the Paris stock exchange. The stock, which has lost half its value since the middle of last year, has bobbed up and down since the announcement of the trading loss Jan. 24.
29) Meanwhile, French radio and television reported that police searched the Paris apartment of Kerviel's older brother, Olivier Kerviel. Jerome Kerviel was released from police custody on Monday but barred from leaving France, and his whereabouts were unknown.
2008-01-31
French bank Societe Generale ' s board keeps CEO, orders probe of trading losses
(APW_ENG_20080131.0083)
1) Societe Generale's CEO is keeping his job, facing down -- at least for now -- mounting pressure for his resignation over a trading scandal that cost the bank billions.
2) The board on Wednesday rebuffed calls by French President Nicolas Sarkozy for top executives to face the "consequences" of the huge losses which resulted from unauthorized trading, giving Daniel Bouton and co-chief executive officer Philippe Citerne their universal backing at a meeting.
3) But the head of the nation's central bank said controls under Bouton's watch were lacking and questioned why "malfunctions" at Societe Generale were ignored.
4) Bouton offered to resign as the trading crisis unfolded last week and the bank said it had lost euro4.82 billion (US$7.09 billion) in unwinding trades by 31-year-old futures trader Jerome Kerviel. The board refused his offer.
5) "The board asked me to stay at the helm of the ship in the storm we are in," Bouton told France-2 television. "I am a man of duty. I am not going to jump overboard when the board asks me to stay and do my duty."
6) Questions have mounted about how Kerviel could have fooled his superiors, and how the bank handled the discovery of Kerviel's unauthorized transactions.
7) The bank's controls "didn't function like they should have" and "were not followed up appropriately," Bank of France chief Christian Noyer said at a hearing before the French Senate, reporting on initial investigations conducted last week.
8) "We must focus on the reasons why the anomalies, the malfunctions, were not spotted, analyzed, or passed upward to a high-enough level, dealt with and followed up," he said.
9) The trader told investigators that he believes his bosses turned a blind eye to his questionable deals as long as he brought in money for the bank, according to excerpts published Tuesday by two media outlets that were verified by a prosecution official.
10) The bank's lawyer said Kerviel was lying, and its CEO insisted that the bank's role was "to divide our risks ... never to expose ourselves to speculation of this type."
11) Bouton asked, "Why did (Kerviel) think he was in another world, the world of big speculative finance? That's not Societe Generale. We're about our clients."
12) The Bank of France chief was questioned in the Senate along with the head of France's financial market regulator, Michel Prada.
13) Both men said they approved Bouton's decision to secretly unwind Kerviel's positions over three days before disclosing last Thursday the record losses that require the bank to seek an extra euro5.5 billion (US$8.15 billion) in new capital.
14) Prada said Bouton "acted well," and shareholders "were protected from what could have been a major crisis."
15) The French Financial Market Authority, the AMF, will investigate stock movements to ensure there was no insider trading while the information was kept out of the public domain. A lawyer for a group of Societe Generale shareholders said they had filed a legal complaint Monday asking investigators to look into possible insider trading.
16) Societe Generale also announced it is setting up a committee to investigate what went wrong, with the help of auditing firm PricewaterhouseCoopers.
17) The committee will examine the causes and sizes of the trading losses and look into whether the bank accurately communicated information about the scandal.
18) While board members were meeting, bank employees worried about their jobs and the fate of one of Europe's most respected banks began streaming out of the Societe Generale's headquarters in Paris' business district in a spontaneous demonstration of support for Bouton.
19) "We are totally in solidarity with the president," said Philippe le Blanc, 42, who has worked for the bank for seven years.
20) Headhunters, preying on employee fears about their bonuses following the loss, are looking to poach the shaken French bank's staff.
21) Jean-Pierre Mustier, head of the bank's corporate and investment banking arm, has said the bank will pay staff to retain them amid the crisis.
22) Bouton and Citerne have said they won't receive bonuses or stock options for 2007 and will forgo salaries for the first half of this year.
23) Analysts are also speculating about the dismantling of Societe Generale, with its units being divided up among other leading banks.
24) Prime Minister Francois Fillon has said his government will seek to block any hostile bid for the bank, raising eyebrows among EU competition authorities in Brussels, which cautioned France on Wednesday to treat potential bidders without regard to national interests.
25) SocGen spokeswoman Laura Schalk said there was no discussion at Wednesday's board meeting of a friendly takeover offer for the bank. Bouton said it would be "strictly no problem" for the bank to remain independent because it is still profitable.
26) Analysts say France's largest bank and Societe Generale's chief competitor, BNP Paribas, would be the most likely buyer of all or part of the struggling bank. Other names mentioned include French rival Credit Agricole, Britain's HSBC Holdings, Germany's Deutsche Bank AG, Spain's Banco Santander SA and Italy's UniCredit SpA.
27) BNP chief financial officer Philippe Bordenave, speaking as the bank announced a drop in fourth-quarter profits for 2007 on Wednesday, refused to comment on Societe Generale's future.
28) Shares of Societe Generale closed up 4.3 percent Wednesday afternoon at euro81.8 (US$121.15) on the Paris stock exchange. The stock, which has lost half its value since the middle of last year, has bobbed up and down since the announcement of the trading loss Jan. 24.
29) Meanwhile, French radio and television reported that police searched the Paris apartment of Kerviel's older brother, Olivier Kerviel. Jerome Kerviel was released from police custody on Monday but barred from leaving France, and his whereabouts were unknown.
French trader ' s computer seized in probe into losses at Societe Generale
(APW_ENG_20080131.1041)
1) Investigators questioned an executive at France's Societe Generale on Thursday and have seized the personal computer of the futures trader the bank blames for enormous trading losses, judicial officials said.
2) The computer was seized at the apartment of Jerome Kerviel's brother, Olivier, during a search Wednesday night, a judicial official said. Another judicial official said Societe Generale has given investigators records of Jerome Kerviel's computer operations at the bank and e-mails sent to his superiors.
3) The officials spoke on condition of anonymity because they were not authorized to speak publicly about the continuing probe.
4) Societe Generale stunned the banking world when it announced last week that it lost euro4.82 billion (US$7.09 billion) in cleaning up for unauthorized trades by Kerviel. Investigating judges have filed preliminary charges against Kerviel for forgery, breach of trust and unauthorized computer activity.
5) During questioning by investigators Saturday through Monday, Kerviel said his superiors had turned a blind eye to his actions as long as he was making money for the bank. The bank's lawyer, Jean Veil, says the claim is false.
6) On Thursday, one of the investigating judges questioned Christian Schricke, senior executive vice president and corporate secretary of the bank, Veil said. Societe Generale is a complainant in the probe.
7) Schricke explained to the judge the work flow of the department where Kerviel worked, and explained Kerviel's responsibilities as a futures trader dealing in arbitrage, Veil said.
8) Kerviel is accused of overstepping his authority and betting euro50 billion (US$73 billion) -- more than the bank's market value -- on futures in European equity markets.
9) The judges released Kerviel from custody during the investigation, but prosecutors appealed that decision. Judicial officials said a ruling on the appeal could be made next week though no date has been set. Kerviel's whereabouts were not publicly known, though he has been ordered to stay in France.
10) Societe Generale's announcement of the massive losses prompted renewed speculation of a takeover or dismantling of the bank, one of Europe's most respected and a leading world player in derivatives.
11) The bank's cross-town rival BNP Paribas SA said Thursday it is considering a bid for Societe Generale. euro "We are only thinking about SocGen because all European banks are thinking about it," BNP Paribas spokeswoman Christelle Maldague said.
12) BNP Paribas shares fell 3.2 percent to euro64.66 ($96.15) in Paris trading, while Societe Generale shares -- which have fluctuated broadly since last week's announcement -- were calmer Thursday, trading up 1.6 percent to euro83.18 ($123.69) in afternoon.
French trader ' s computer seized in probe into losses at Societe Generale
(APW_ENG_20080131.1043)
1) Investigators questioned an executive at France's Societe Generale on Thursday and have seized the personal computer of the futures trader the bank blames for enormous trading losses, judicial officials said.
2) The computer was seized at the apartment of Jerome Kerviel's brother, Olivier, during a search Wednesday night, a judicial official said. Another judicial official said Societe Generale has given investigators records of Jerome Kerviel's computer operations at the bank and e-mails sent to his superiors.
3) The officials spoke on condition of anonymity because they were not authorized to speak publicly about the continuing probe.
4) Societe Generale stunned the banking world when it announced last week that it lost euro4.82 billion (US$7.09 billion) in cleaning up for unauthorized trades by Kerviel. Investigating judges have filed preliminary charges against Kerviel for forgery, breach of trust and unauthorized computer activity.
5) During questioning by investigators Saturday through Monday, Kerviel said his superiors had turned a blind eye to his actions as long as he was making money for the bank. The bank's lawyer, Jean Veil, says the claim is false.
6) On Thursday, one of the investigating judges questioned Christian Schricke, senior executive vice president and corporate secretary of the bank, Veil said. Societe Generale is a complainant in the probe.
7) Schricke explained to the judge the work flow of the department where Kerviel worked, and explained Kerviel's responsibilities as a futures trader dealing in arbitrage, Veil said.
8) Kerviel is accused of overstepping his authority and betting euro50 billion (US$73 billion) -- more than the bank's market value -- on futures in European equity markets.
9) The judges released Kerviel from custody during the investigation, but prosecutors appealed that decision. Judicial officials said a ruling on the appeal could be made next week though no date has been set. Kerviel's whereabouts were not publicly known, though he has been ordered to stay in France.
10) Societe Generale's announcement of the massive losses prompted renewed speculation of a takeover or dismantling of the bank, one of Europe's most respected and a leading world player in derivatives.
11) The bank's cross-town rival BNP Paribas SA said Thursday it is considering a bid for Societe Generale. euro "We are only thinking about SocGen because all European banks are thinking about it," BNP Paribas spokeswoman Christelle Maldague said.
12) BNP Paribas shares fell 3.2 percent to euro64.66 ($96.15) in Paris trading, while Societe Generale shares -- which have fluctuated broadly since last week's announcement -- were calmer Thursday, trading up 1.6 percent to euro83.18 ($123.69) in afternoon.
French trader ' s computer seized in probe into losses at Societe Generale
(APW_ENG_20080131.1319)
1) Investigators questioned an executive at France's Societe Generale on Thursday and have seized the personal computer of the futures trader the bank blames for enormous trading losses, judicial officials said.
2) The computer was seized at the apartment of Jerome Kerviel's brother, Olivier, during a search Wednesday night, a judicial official said. Another judicial official said Societe Generale has given investigators records of Jerome Kerviel's computer operations at the bank and e-mails sent to his superiors.
3) The officials spoke on condition of anonymity because they were not authorized to speak publicly about the continuing probe.
4) Societe Generale stunned the banking world when it announced last week that it lost euro4.82 billion (US$7.09 billion) in cleaning up for unauthorized trades by Kerviel. Investigating judges have filed preliminary charges against Kerviel for forgery, breach of trust and unauthorized computer activity.
5) During questioning by investigators Saturday through Monday, Kerviel said his superiors had turned a blind eye to his actions as long as he was making money for the bank. The bank's lawyer, Jean Veil, says the claim is false.
6) On Thursday, one of the investigating judges questioned Christian Schricke, senior executive vice president and corporate secretary of the bank, Veil said. Societe Generale is a complainant in the probe.
7) Schricke explained to the judge the work flow of the department where Kerviel worked, and explained Kerviel's responsibilities as a futures trader practicing arbitrage, Veil said.
8) Kerviel is accused of overstepping his authority and betting euro50 billion (US$73 billion) -- more than the bank's market value -- on futures in European equity markets.
9) The judges released Kerviel from custody during the investigation, but prosecutors appealed that decision. Judicial officials said a ruling on the appeal could be made next week though no date has been set. Kerviel's whereabouts were not publicly known, though he has been ordered to stay in France.
10) Amateur video of Kerviel's questioning, obtained by Associated Press Television News, shows the trader studying documents beneath a bright table lamp, then signing them. Dressed in a dark shirt and jeans, Kerviel then leans back in his chair, stands up and walks to another room, smiling.
11) The video, among the first images seen of the elusive Kerviel since the announcement of the trading losses last week, was shot before his release late Sunday night from a building across the street.
12) Societe Generale's announcement of the massive losses prompted renewed speculation of a takeover or dismantling of the bank, one of Europe's most respected and a leading world player in derivatives.
13) The bank's cross-town rival BNP Paribas SA said Thursday it is considering a bid for Societe Generale.
14) "We are only thinking about SocGen because all European banks are thinking about it," BNP Paribas spokeswoman Christelle Maldague said.
15) BNP Paribas shares fell 3.2 percent to euro64.66 ($96.15) in Paris trading, while Societe Generale shares -- which have fluctuated broadly since last week's announcement -- were calmer Thursday, trading up 1.6 percent to euro83.18 ($123.69) in afternoon.
16) Kerviel's brother, Olivier, worked for a BNP Paribas subsidiary before quitting last year following a bad trade, his lawyer said Thursday.
17) Lawyer Felix de Belloy denied allegations in French and international media that his client had left the subsidiary, B. Capital, after pocketing unauthorized profits.
18) He said Olivier Kerviel quit the company in March 2007 after a transaction that caused losses to a client. "Kerviel immediately recognized his error and fully reimbursed the sums transferred during the operation," Belloy said in a statement. He said the company did not seek Kerviel's departure.
2008-02-03
Investigators question Societe Generale executives in probe of massive losses
(APW_ENG_20080203.0664)
1) French investigators have questioned several executives at Societe Generale as part of a probe into the futures trader that the bank has blamed for billions of euros (dollars) in losses, a judicial official said Sunday.
2) Societe Generale stunned the banking world Jan. 24 when it announced that it lost 4.82 billion euros (US$7.09 billion) in cleaning up unauthorized trades by a futures trader. It said Jerome Kerviel overstepped his authority and bet euro50 billion (US$73 billion) -- more than the bank's market value -- on futures in European equity markets.
3) On Friday, Xavier de la Maisonneuve, the bank's business ethics expert, answered investigators' questions, as did an executive charged with carrying out an audit of Kerviel's department, the judicial official said, speaking on condition of anonymity because the investigation is ongoing.
4) Societe Generale is a complainant in the probe. A bank spokeswoman did not immediately return a call seeking comment.
5) Investigating judges have filed preliminary charges against Kerviel for forgery, breach of trust and unauthorized computer activity. Investigators have also seized Kerviel's personal computer to study it.
6) Officials said Friday that one of the investigating judges working on the case questioned Christian Schricke, senior executive vice president and corporate secretary of the bank.
7) Finance Minister Christine Lagarde is expected Monday to hand the prime minister a report on the lessons to learn from the Societe Generale scandal.
8) Analysts have been speculating about the future of the French bank, which is seeking euro5.5 billion (US$8.15 billion) in new capital. Some think it could be bought or dismantled, with its units being divided up among other leading banks.
9) Prime Minister Francois Fillon has said his government will seek to block any hostile bid. President Nicolas Sarkozy's top aide, Claude Gueant, said in an interview published Sunday by Le Parisien newspaper that it was up to Societe Generale to choose its future path, though the government would prefer "a friendly solution" rather than a hostile takeover.
2008-02-04
French finance minister says Societe Generale followed rules in handling trading losses
(APW_ENG_20080204.0401)
1) French Finance Minister Christine Lagarde said Monday that some internal controls at Societe Generale failed or were not heeded before the banking giant announced massive losses attributed to a rogue trader.
2) Lagarde, who submitted a report on the case to the French prime minister Monday, said the bank followed market rules in unwinding the trader's transactions. But she also urged greater controls on banks in France and worldwide.
3) In a bombshell announcement Jan. 24, Societe Generale said that it had lost euro4.82 billion (US$7.09 billion) in cleaning up unauthorized transactions by trader Jerome Kerviel.
4) The bank says Kerviel overstepped his authority and bet euro50 billion (US$73 billion) -- more than the bank's market value -- on futures in European equity markets. Kerviel told investigators that his superiors had turned a blind eye to his activity, a claim the bank's lawyer called false.
5) Lagarde's report did not assign blame but highlighted lessons to be learned from the scandal, which has deeply shaken France's banking sector and prompted speculation that Societe Generale could be bought out or broken up.
6) "Very clearly, certain mechanisms of internal controls of Societe Generale did not function, and those that functioned were not always followed by appropriate modifications," Lagarde told reporters after submitting her report.
7) She said Societe Generale's management of the transactions was "in conformity with the existing regulations."
8) "The unwinding of the positions at the source of the loss on Jan. 21, 22 and 23 was done in a professional way in difficult market conditions that could not be attributed to Societe Generale," Lagarde said in a statement.
9) The bank says the losses were so staggering because of bad timing: Just as it discovered Kerviel's activity and started closing his positions, world financial markets fell. Some have speculated the bank's actions in liquidating Kerviel's moves may have helped send stock markets down.
10) Lagarde urged closer study of trading risks linked to human error or fraud and suggested tighter and more consistent banking controls.
11) "France will propose... that discussions at a European and international level be accelerated so that international standards can be applied to all the actors," the report said.
12) The loss wiped out the bulk of SocGen's net profit for 2007 and brought pressure on its top executives to resign.
13) Investigating judges have filed preliminary charges against Kerviel for forgery, breach of trust and unauthorized computer activity.
French finance minister says Societe Generale controls failed before trading loss
(APW_ENG_20080204.0489)
1) French Finance Minister Christine Lagarde said Monday that some internal controls at Societe Generale failed or were not heeded before the banking giant announced billions of euros in losses precipitated by a rogue trader.
2) Lagarde submitted a report on the case to the French prime minister Monday that notes the bank's weaknesses but largely backs up its version of events before and after the bombshell announcement Jan. 24 of the trading drama.
3) Lagarde said the bank followed market rules in unwinding the trader's transactions. Her report suggested other banks could be susceptible to similar problems and urged greater controls on banks in France and worldwide.
4) "Very clearly, certain mechanisms of internal controls of Societe Generale did not function, and those that functioned were not always followed by appropriate modifications," Lagarde told reporters after submitting her report.
5) The bank says it lost euro4.82 billion (US$7.09 billion) in cleaning up unauthorized transactions by trader Jerome Kerviel. It says Kerviel evaded the bank's security controls and overstepped his authority and bet euro50 billion (US$73 billion) -- more than the bank's market value -- on futures in European equity markets.
6) Lagarde's report said the Finance Ministry had no reason to question the bank's assertion that Kerviel acted alone.
7) The bank would not comment Monday on the report.
8) The report did not assign blame but highlighted lessons to be learned from the scandal, which has deeply shaken France's banking sector and prompted speculation that Societe Generale could be bought out or broken up. Lagarde defended and explained the report later Monday to lawmakers at the National Assembly.
9) The bank says the losses were so staggering because of bad timing: Just as it discovered Kerviel's activity and started closing his positions, world financial markets fell. Some have speculated the bank's actions in liquidating Kerviel's moves may have helped send stock markets down.
10) Lagarde said Societe Generale's management of the transactions was "in conformity with the existing regulations."
11) "The unwinding of the positions at the source of the loss on Jan. 21, 22 and 23 was done in a professional way in difficult market conditions that could not be attributed to Societe Generale," Lagarde said in a statement.
12) Lagarde's report said that if Societe Generale had announced the unauthorized positions before closing them, that could have upset "the stability of the French and international financial systems."
13) Lagarde urged closer study of trading risks linked to human error or fraud and suggested tighter and more consistent banking controls.
14) "France will propose ... that discussions at a European and international level be accelerated so that international standards can be applied to all the actors," the report said.
15) The report proposed that the French Banking Commission should be allowed to impose higher penalties on banks that break the rules.
16) The loss wiped out the bulk of SocGen's net profit for 2007, and came as the bank is already suffering from the crisis on U.S. subprime mortgage markets.
17) The bank's shares, which have fluctuated wildly since the announcement, were trading down 3.1 percent at euro81.05 (US$120.68) at midday trading Monday.
18) Investigating judges have filed preliminary charges against Kerviel for forgery, breach of trust and unauthorized computer activity.
French finance minister says Societe Generale controls failed before trading loss
(APW_ENG_20080204.0595)
1) French Finance Minister Christine Lagarde said Monday that some internal controls at Societe Generale failed or were not heeded before the banking giant announced billions of euros in losses precipitated by a rogue trader.
2) Lagarde submitted a report on the case to the French prime minister Monday that notes the bank's weaknesses but largely backs up its version of events before and after the bombshell announcement Jan. 24 of the trading drama.
3) Lagarde said the bank followed market rules in unwinding the trader's transactions, though she said it should have informed the government of the suspicious activity earlier. Her report suggested other banks could be susceptible to similar problems and urged greater controls on banks in France and worldwide.
4) "Very clearly, certain mechanisms of internal controls of Societe Generale did not function, and those that functioned were not always followed by appropriate modifications," Lagarde told reporters after submitting her report.
5) The bank says it lost euro4.82 billion (US$7.09 billion) in cleaning up unauthorized transactions by trader Jerome Kerviel. It says Kerviel evaded the bank's security controls and overstepped his authority and bet euro50 billion (US$73 billion) -- more than the bank's market value -- on futures in European equity markets.
6) Lagarde's report said the Finance Ministry had no reason to question the bank's assertion that Kerviel acted alone.
7) The bank would not comment Monday on the report.
8) The report did not assign blame but highlighted lessons to be learned from the scandal, which has deeply shaken France's banking sector and prompted speculation that Societe Generale could be bought out or broken up. Lagarde later defended her bank
9) Lagarde, in hearings later Monday before lawmakers at the National Assembly, said the government was open to friendly bids for Societe Generale if it comes to that. Prime Minister Francois Fillon has said his government will seek to block any hostile bid for the private bank.
10) The bank says the losses were so staggering because of bad timing: Just as it discovered Kerviel's activity and started closing his positions, world financial markets fell. Some have speculated the bank's actions in liquidating Kerviel's moves may have helped send stock markets down.
11) Lagarde said Societe Generale's management of the transactions was "in conformity with the existing regulations"
12) "The unwinding of the positions at the source of the loss on Jan. 21, 22 and 23 was done in a professional way in difficult market conditions that could not be attributed to Societe Generale," Lagarde said in a statement.
13) Lagarde's report said that if Societe Generale had announced the unauthorized positions before closing them, that could have upset "the stability of the French and international financial systems."
14) Lagarde urged closer study of trading risks linked to human error or fraud and suggested tighter and more consistent banking controls.
15) "France will propose ... that discussions at a European and international level be accelerated so that international standards can be applied to all the actors," the report said.
16) The report proposed that the French Banking Commission should be allowed to impose higher penalties on banks that break the rules.
17) The loss wiped out the bulk of SocGen's net profit for 2007, and came as the bank is already suffering from the crisis on U.S. subprime mortgage markets.
18) The bank's shares, which have fluctuated wildly since the announcement, were trading down 3.1 percent at euro81.05 (US$120.68) at midday trading Monday.
19) Investigating judges have filed preliminary charges against Kerviel for forgery, breach of trust and unauthorized computer activity. Such preliminary charges allow the magistrates time to further investigate and decide whether to send the case to trial.
SEC investigates stock sales by US board member of Societe Generale before loss announcement
(APW_ENG_20080204.0975)
1) The Securities and Exchange Commission is examining stock sales by an American board member of Societe Generale, The Wall Street Journal reported Monday.
2) The SEC inquiry, an expansion of one by French regulators, is investigating stock sales investor Robert Day and two foundations linked to him made days before the bank announced a $7 billion (euro4.7 billion) loss caused by a rogue trader. A spokesman for Day said he had promised to cooperate with any investigations.
3) In a story on its Web site, The Journal cited unnamed people familiar with the matter.
4) The Journal also said the U.S. attorney's office in Brooklyn, New York, had launched criminal investigation related to Societe Generale, citing a person familiar with the matter, saying its precise focus wasn't immediately clear.
5) Robert Nardoza, a spokesman for U.S. Attorney Roslynn Mauskopf, declined to comment.
6) The French regulatory agency said last week it opened an investigation into Societe Generale.
7) According to filings last week in France, Day and the charitable foundations sold shares in Societe Generale on Jan. 9, Jan. 10 and Jan. 18. The bank says it launched an internal investigation on Jan. 18, after transactions by rogue trader Jerome Kerviel raised red flags. The stock sales by Day and the foundations totaled $206 million (euro139 million).
8) The bank made its bombshell-loss announcement on Jan. 24.
9) Day is an investment manager with Los Angeles-based Trust Co. of the West.
10) The French regulators made no allegation of wrongdoing, but an attorney for some Societe Generale shareholders called for an investigation of illegal insider trading.
11) SEC spokesman John Nester declined to comment.
12) Societe Generale also declined comment on the Journal report. Last week, the bank said in a statement that Day sold the shares during a limited window of time in which board members are authorized to sell stock. "No inside information was used in any way," the bank's statement said. "Mr. Day, like the other board members, was not advised of Mr. Kerviel's trading losses."
13) The spokesman for Day, Josh Pekarsky, said in an e-mailed statement: "Mr. Day and his family's trusts and charitable foundations sold Societe Generale shares in December and January, which was a window of time where such trades were permitted under Societe Generale's trading policies. All required government disclosures were made. No inside information was used in any way with respect to these sales. Mr. Day has pledged his cooperation into any inquiries of this matter."
French finance minister says Societe Generale controls failed before trading loss
(APW_ENG_20080204.1026)
1) Controls at French banking icon Societe Generale missed or ignored suspicious activity by a trader whose dealings led to billions of euros (dollars) in losses, the finance minister said Monday.
2) Meanwhile, repercussions of the affair may have reached the United States: the U.S. Securities and Exchange Commission has opened an investigation into stock sales by an America Societe Generale board member in the days before the losses were made public, the Wall Street Journal reported.
3) French Finance Minister Christine Lagarde largely took the bank's side in a careful 11-page report, submitted Monday to the prime minister, on a trading scandal that has embarrassed and unsettled the banking sector.
4) The report backs embattled CEO Daniel Bouton and the way he handled the discovery that the trader had overstepped his authority, evaded computer controls and bet more than the bank's worth on futures in European equity markets.
5) It also seeks to absolve the government by saying the bank took too long to report the suspicious activity to government officials. With speculation swirling that the bank could be sold off or broken up, Lagarde insisted Societe Generale didn't need propping up -- but conceded that the government would favor a friendly takeover if the private bank can no longer stand on its own.
6) The loss wiped out the bulk of SocGen's net profit for 2007, and came as the bank is already suffering from the crisis on U.S. subprime mortgage markets. The bank's shares, which have fluctuated wildly since the announcement, closed down 4.7 percent at euro83.61 (US$123.74) in Paris trading Monday.
7) Lagarde's strictest comments concerned the bank's own controls.
8) "Very clearly, certain mechanisms of internal controls of Societe Generale did not function, and those that functioned were not always followed by appropriate modifications," Lagarde told reporters after submitting her report.
9) The bank says it lost euro4.82 billion (US$7.09 billion) in cleaning up unauthorized transactions by trader Jerome Kerviel.
10) Lagarde's report said the Finance Ministry had no reason to question the bank's assertion that Kerviel acted alone, and that the bank followed market rules in unwinding the trader's transactions.
11) Her report suggested other banks could be susceptible to similar problems and urged greater controls on banks in France and worldwide.
12) The bank says the losses were so staggering because of bad timing. Just as it discovered Kerviel's activity and started closing his positions, world financial markets fell. Some have speculated the bank's actions in liquidating Kerviel's moves may have helped send stock markets down.
13) Lagarde said Societe Generale's management of the transactions was "in conformity with the existing regulations."
14) "The unwinding of the positions at the source of the loss on Jan. 21, 22 and 23 was done in a professional way in difficult market conditions that could not be attributed to Societe Generale," Lagarde said.
15) Lagarde urged closer study of trading risks linked to human error or fraud and suggested tighter and more consistent European and international banking controls.
16) Among problems the report cited at Societe Generale were cracks in the wall separating the trading floor and the "back" and "middle" offices, where trades are controlled; problems with computer passwords and other security measures; and "atypical behavior" that went unnoticed such as Kerviel not taking vacation days.
17) Investigating judges have filed preliminary charges against Kerviel for forgery, breach of trust and unauthorized computer activity. Such preliminary charges allow the magistrates time to further investigate and decide whether to send the case to trial.
18) French market regulators are investigating stock trades by U.S. investor Robert Day, a member of the Societe Generale board. Day, an investment manager with U.S.-based Trust Company of the West, or TCW, and his family's trusts and foundations sold euro140 million ($206 million) worth of shares in January, before the trading losses were announced.
19) Societe Generale would not comment on the report of the U.S. probe into Day's trades. The bank maintains that Day had no inside information about the unauthorized activity by Kerviel and that Day sold the shares during a limited window when board members are authorized to sell stock.
20) A spokesman for Day, Josh Pekarsky, said in an e-mailed statement: "Mr. Day and his family's trusts and charitable foundations sold Societe Generale shares in December and January, which was a window of time where such trades were permitted under Societe Generale's trading policies. All required government disclosures were made. No inside information was used in any way with respect to these sales. Mr. Day has pledged his cooperation into any inquiries of this matter."
SEC investigates stock sales by US board member of Societe Generale before loss announcement
(APW_ENG_20080204.1051)
1) The Securities and Exchange Commission is examining stock sales by an American board member of Societe Generale, The Wall Street Journal reported Monday.
2) The SEC inquiry is investigating stock sales investor Robert Day and two foundations linked to him made days before the French bank announced a $7 billion (euro4.7 billion) loss caused by a rogue trader. A spokesman for Day said he had promised to cooperate with any investigations.
3) In a story on its Web site, The Journal cited unnamed people familiar with the matter.
4) The Journal also said the U.S. attorney's office in Brooklyn, New York, had launched a criminal investigation related to Societe Generale, citing a person familiar with the matter, saying its precise focus wasn't immediately clear.
5) Robert Nardoza, a spokesman for U.S. Attorney Benton J. Campbell, declined to comment.
6) The French regulatory agency said last week it opened an investigation into Societe Generale.
7) According to filings last week in France, Day and the charitable foundations sold shares in Societe Generale on Jan. 9, Jan. 10 and Jan. 18. The bank says it launched an internal investigation on Jan. 18, after transactions by trader Jerome Kerviel raised red flags. The stock sales by Day and the foundations totaled $206 million (euro139 million).
8) Day retains a large stake in Societe Generale, according to The Journal report.
9) The bank made its bombshell-loss announcement on Jan. 24.
10) Day is an investment manager with Los Angeles-based Trust Co. of the West.
11) The French regulators made no allegation of wrongdoing, but an attorney for some Societe Generale shareholders called for an investigation of illegal insider trading.
12) SEC spokesman John Nester declined to comment.
13) Societe Generale also declined comment on the Journal report. Last week, the bank said in a statement that Day sold the shares during a limited window of time in which board members are authorized to sell stock. "No inside information was used in any way," the bank's statement said. "Mr. Day, like the other board members, was not advised of Mr. Kerviel's trading losses."
14) The spokesman for Day, Josh Pekarsky, said in an e-mailed statement: "Mr. Day and his family's trusts and charitable foundations sold Societe Generale shares in December and January, which was a window of time where such trades were permitted under Societe Generale's trading policies. All required government disclosures were made. No inside information was used in any way with respect to these sales. Mr. Day has pledged his cooperation into any inquiries of this matter."
SEC investigates stock sales by US board member of Societe Generale before loss announcement
(APW_ENG_20080204.1292)
1) The Securities and Exchange Commission is examining stock sales by an American board member of Societe Generale, The Wall Street Journal reported Monday.
2) The SEC inquiry, an expansion of one by French regulators, is investigating stock sales investor Robert Day and two foundations linked to him made days before the bank announced a $7 billion (euro4.7 billion) loss caused by a rogue trader. A spokesman for Day said he had promised to cooperate with any investigations.
3) In a story on its Web site, The Journal cited unnamed people familiar with the matter.
4) The Journal also said the U.S. attorney's office in Brooklyn, New York, had launched criminal investigation related to Societe Generale, citing a person familiar with the matter, saying its precise focus wasn't immediately clear.
5) Robert Nardoza, a spokesman for U.S. Attorney Benton J. Campbell, declined to comment.
6) The French regulatory agency said last week it opened an investigation into Societe Generale.
7) According to filings last week in France, Day and the charitable foundations sold shares in Societe Generale on Jan. 9, Jan. 10 and Jan. 18. The bank says it launched an internal investigation on Jan. 18, after transactions by rogue trader Jerome Kerviel raised red flags. The stock sales by Day and the foundations totaled $206 million (euro139 million).
8) Day retains a large stake in Societe Generale of around 1.9 million shares.
9) The bank made its bombshell-loss announcement on Jan. 24.
10) Day is founder and chairman of Los Angeles-based Trust Co. of the West, a firm with around $150 billion (euro101.1 billion) in assets under management in which Societe Generale owns a major stake.
11) The French regulators made no allegation of wrongdoing, but an attorney for some Societe Generale shareholders called for an investigation of illegal insider trading.
12) SEC spokesman John Nester declined to comment.
13) Societe Generale also declined comment on the Journal report. Last week, the bank said in a statement that Day sold the shares during a limited window of time in which board members are authorized to sell stock. "No inside information was used in any way," the bank's statement said. "Mr. Day, like the other board members, was not advised of Mr. Kerviel's trading losses."
14) The spokesman for Day, Josh Pekarsky, said in an e-mailed statement: "Mr. Day and his family's trusts and charitable foundations sold Societe Generale shares in December and January, which was a window of time where such trades were permitted under Societe Generale's trading policies. All required government disclosures were made. No inside information was used in any way with respect to these sales. Mr. Day has pledged his cooperation into any inquiries of this matter."
2008-02-05
French finance minister says Societe Generale controls failed before trading loss
(APW_ENG_20080205.0014)
1) Controls at French banking icon Societe Generale missed or ignored suspicious activity by a trader whose dealings led to billions of euros (dollars) in losses, the finance minister said.
2) Meanwhile, repercussions of the affair may have reached the United States: the U.S. Securities and Exchange Commission has opened an investigation into stock sales by an America Societe Generale board member in the days before the losses were made public, the Wall Street Journal reported.
3) French Finance Minister Christine Lagarde largely took the bank's side in a careful 11-page report, submitted Monday to the prime minister, on a trading scandal that has embarrassed and unsettled the banking sector.
4) The report backs embattled CEO Daniel Bouton and the way he handled the discovery that the trader had overstepped his authority, evaded computer controls and bet more than the bank's worth on futures in European equity markets.
5) It also seeks to absolve the government by saying the bank took too long to report the suspicious activity to government officials. With speculation swirling that the bank could be sold off or broken up, Lagarde insisted Societe Generale didn't need propping up -- but conceded that the government would favor a friendly takeover if the private bank can no longer stand on its own.
6) The loss wiped out the bulk of SocGen's net profit for 2007, and came as the bank is already suffering from the crisis on U.S. subprime mortgage markets. The bank's shares, which have fluctuated wildly since the announcement, closed down 4.7 percent at euro83.61 (US$123.74) in Paris trading Monday.
7) Lagarde's strictest comments concerned the bank's own controls.
8) "Very clearly, certain mechanisms of internal controls of Societe Generale did not function, and those that functioned were not always followed by appropriate modifications," Lagarde told reporters after submitting her report.
9) The bank says it lost euro4.82 billion (US$7.09 billion) in cleaning up unauthorized transactions by trader Jerome Kerviel.
10) Lagarde's report said the Finance Ministry had no reason to question the bank's assertion that Kerviel acted alone, and that the bank followed market rules in unwinding the trader's transactions.
11) Her report suggested other banks could be susceptible to similar problems and urged greater controls on banks in France and worldwide.
12) The bank says the losses were so staggering because of bad timing. Just as it discovered Kerviel's activity and started closing his positions, world financial markets fell. Some have speculated the bank's actions in liquidating Kerviel's moves may have helped send stock markets down.
13) Lagarde said Societe Generale's management of the transactions was "in conformity with the existing regulations."
14) "The unwinding of the positions at the source of the loss on Jan. 21, 22 and 23 was done in a professional way in difficult market conditions that could not be attributed to Societe Generale," Lagarde said.
15) Lagarde urged closer study of trading risks linked to human error or fraud and suggested tighter and more consistent European and international banking controls.
16) Among problems the report cited at Societe Generale were cracks in the wall separating the trading floor and the "back" and "middle" offices, where trades are controlled; problems with computer passwords and other security measures; and "atypical behavior" that went unnoticed such as Kerviel not taking vacation days.
17) Investigating judges have filed preliminary charges against Kerviel for forgery, breach of trust and unauthorized computer activity. Such preliminary charges allow the magistrates time to further investigate and decide whether to send the case to trial.
18) French market regulators are investigating stock trades by U.S. investor Robert Day, a member of the Societe Generale board. Day, an investment manager with U.S.-based Trust Company of the West, or TCW, and his family's trusts and foundations sold euro140 million ($206 million) worth of shares in January, before the trading losses were announced.
19) Societe Generale would not comment on the report of the U.S. probe into Day's trades. The bank maintains that Day had no inside information about the unauthorized activity by Kerviel and that Day sold the shares during a limited window when board members are authorized to sell stock.
20) A spokesman for Day, Josh Pekarsky, said in an e-mailed statement: "Mr. Day and his family's trusts and charitable foundations sold Societe Generale shares in December and January, which was a window of time where such trades were permitted under Societe Generale's trading policies. All required government disclosures were made. No inside information was used in any way with respect to these sales. Mr. Day has pledged his cooperation into any inquiries of this matter."
Societe Generale confirms US investigation about trading losses
(APW_ENG_20080205.0422)
1) U.S. prosecutors are investigating staggering trading losses at French banking giant Societe Generale, the bank said Tuesday.
2) Societe Generale is already the subject of several investigations in France into its announcement Jan. 24 that it lost euro4.82 billion (US$7.09 billion) in cleaning up unauthorized transactions by a single futures trader.
3) Societe Generale's New York branch was contacted on Jan. 25 by the U.S. Attorney's Office for the Eastern District of New York, bank spokeswoman Laura Schalk said.
4) She said the bank was cooperating fully with the investigation, but would not elaborate on the focus of the probe.
5) The U.S. probe comes as the bank is facing questions about how its extensive control systems failed to spot the suspicious trading activity and how it disclosed the losses.
6) Societe Generale is also facing questions about its future, amid speculation it could be bought out or broken up. The trading debacle came on top of losses at the bank linked to the subprime mortgage crisis in the United States.
7) The New York probe comes as the U.S. Securities and Exchange Commission reportedly opened an investigation into stock sales by American investor Robert Day, a Societe Generale board member, in the days before the losses were made public.
8) Schalk would not comment on the report, published in the Wall Street journal.
9) French market regulators are already investigating stock trades by Day. Day, an investment manager with U.S.-based Trust Company of the West, or TCW, and his family's trusts and foundations sold euro140 million (US$206 million) worth of shares in January, before the trading losses were announced.
10) Societe Generale bank maintains that Day had no inside information about the unauthorized activity by Kerviel and that Day sold the shares during a limited window when board members are authorized to sell stock.
11) The bank's shares have bobbed up and down since the announcement of the trading losses, opened up slightly Monday at euro84.22 (US$124.89).
Societe Generale trader under police protection, questioned about bank losses
(APW_ENG_20080205.0680)
1) A futures trader accused of causing huge losses at French bank Societe Generale is under police protection, the finance minister said Tuesday, while the bank's legal troubles have expanded to the United States.
2) Jerome Kerviel is under police protection because of pressure from "all the people who want to obtain his secrets," Finance Minister Christine Lagarde said on RTL radio. "It is natural that he would be protected."
3) Societe Generale announced Jan. 24 that it lost euro4.82 billion (US$7.09 billion) in cleaning up unauthorized transactions by Kerviel. It was harsh news for the bank -- one of France's biggest -- and for a financial world already roiled by the subprime mortgage crisis.
4) Investigating judges have filed preliminary charges against Kerviel for breach of trust, forgery and unauthorized computer activity.
5) Two investigating judges questioned Kerviel for eight hours on Monday about the case, a judicial official said Tuesday. The official gave no details about the questioning, and spoke on condition of anonymity because the investigation is ongoing.
6) Several investigations are under way into how the bank's controls failed to spot the suspicious trading activity and how it disclosed the losses. The bank is also facing questions about its future, amid speculation it could be bought out or broken up.
7) The probes have spread to the United States.
8) Societe Generale's New York branch was contacted on Jan. 25 by the U.S. Attorney's Office for the Eastern District of New York, bank spokeswoman Laura Schalk said. She said the bank was cooperating fully with the U.S. investigation into the trading losses, but would not elaborate on the focus of the probe.
9) Separately the U.S. Securities and Exchange Commission reportedly opened an investigation into stock sales by American investor Robert Day, a Societe Generale board member, in the days before the losses were made public. Schalk would not comment on the report, published in the Wall Street journal.
10) French market regulators are already investigating stock trades by Day. Day, an investment manager with U.S.-based Trust Company of the West, or TCW, and his family's trusts and foundations sold euro140 million (US$206 million) worth of shares in January, before the trading losses were announced.
11) Societe Generale bank maintains that Day had no inside information about the unauthorized activity by Kerviel and that Day sold the shares during a limited window when board members are authorized to sell stock.
12) The bank's shares have bobbed up and down since the announcement of the trading losses, and were down 2 percent in to euro81.90 (US$121.45) Tuesday afternoon.
2008-02-06
Societe Generale chief questioned in trader probe
(APW_ENG_20080206.1346)
1) Investigators spoke to the chief executive of Societe Generale bank Wednesday as part of a probe into the futures trader that the bank has blamed for billions of euros (dollars) in losses, a judicial official said.
2) Societe Generale CEO and Chairman Daniel Bouton was the latest in a series of executives at the bank to have spoken to investigating magistrates, a judicial official said, on condition of anonymity because the case is ongoing. The bank is a complainant in the case.
3) A spokeswoman for the bank did not immediately return a call seeking confirmation.
4) Societe Generale announced Jan. 24 that it lost euro4.82 billion (US$7.09 billion) in cleaning up unauthorized transactions by a 31-year-old trader named Jerome Kerviel. It said Kerviel overstepped his authority and bet 50 billion euros ($73 billion) -- more than the bank's market value -- on futures in European equity markets.
5) Since the case broke, Societe Generale has facing questions about its future, amid speculation it could be bought out or broken up.
6) Two investigating judges questioned Kerviel for eight hours on Monday about the case. Investigating judges have filed preliminary charges against Kerviel for forgery, breach of trust and unauthorized computer activity.
7) Also on Wednesday, a spokesman for Kerviel denied that he had been placed under police protection, contradicting comments a day earlier by the country's finance minister.
8) "He has never asked for police protection and he never had it," Christophe Reille said. A day earlier, Finance Minister Christine Lagarde had told French radio that Kerviel was under police guard because of "all the people who want to obtain his secrets."
9) Shares of Societe Generale closed up 3.2 percent at euro81.75 ($120.40) on Wednesday.
2008-02-08
Report: French police question second trader over massive losses at Societe Generale
(APW_ENG_20080208.0453)
1) French police were questioning a second trader Friday about whether he knew of trades that led to massive losses at bank Societe Generale, respected daily Le Monde reported.
2) Police were unavailable to immediately confirm the report. The newspaper reported that the trader was being questioned about his relationship with Jerome Kerviel, a futures trader accused by Societe Generale of massive unauthorized bets on European markets.
Report: French police question second trader over massive losses at Societe Generale
(APW_ENG_20080208.0482)
1) French police were questioning a second trader Friday about whether he knew of trades that led to massive losses at bank Societe Generale, respected daily Le Monde reported.
2) Police said they could not comment, and officials at the prosecutors' office were unavailable for comment. Le Monde reported that the trader was being questioned about his relationship with Jerome Kerviel, a futures trader accused by Societe Generale of massive unauthorized bets on European markets that the bank said cost nearly euro5 billion (more than $7 billion) to unwind.
3) Societe Generale has said it believes that Kerviel had no accomplices. Spokespeople for the bank did not immediately return calls Friday morning seeking comment on Le Monde's report.
4) The newspaper reported that the trader in custody worked for a Societe Generale affiliate, Fimat. That company is now called Newedge. Its communications director was in a meeting Friday morning and not immediately available to comment on Le Monde's report, said a woman who answered his telephone and did not give her name.
5) Le Monde said police suspect that the second trader was aware of Kerviel's activities. It said he was taken into custody after a search of his company offices on Thursday.
Report: French police question second trader over massive losses at Societe Generale
(APW_ENG_20080208.0547)
1) French police were questioning a second trader Friday about whether he knew of trades that led to massive losses at bank Societe Generale, respected daily Le Monde reported.
2) Police said they could not comment, and officials at the prosecutors' office were not immediately available for comment.
3) Le Monde reported that the trader was in custody for questioning about his relationship with Jerome Kerviel, a futures trader accused by Societe Generale of massive unauthorized bets on European markets that the bank said cost nearly euro5 billion (more than $7 billion) to unwind.
4) Societe Generale has said it believes that Kerviel had no accomplices. Spokespeople for the bank, one of France's biggest, did not immediately return calls seeking comment on Le Monde's report.
5) Kerviel was in custody for two days last month, and judges filed preliminary charges against him but released him during the investigation.
6) The newspaper reported that the new trader in custody worked for a Societe Generale affiliate formerly called Fimat, now renamed Newedge. Its communications director was not immediately available to comment on Le Monde's report, said a woman who answered his telephone and did not give her name.
7) Le Monde said police suspect that the second trader was aware of Kerviel's activities. It said he was taken into custody after a search of his company offices on Thursday.
8) It said new evidence provided by Societe Generale for the legal probe into Kerviel's actions included a message sent by the second trader to Kerviel over the bank's computer system. The newspaper said the message, sent last Nov. 30, read: "You have done nothing illegal in terms of the law."
9) Societe Generale announced Jan. 24 that it lost euro4.82 billion (US$7.09 billion) in cleaning up unauthorized transactions by 31-year-old Kerviel. It said Kerviel overstepped his authority and bet euro50 billion euros ($73 billion) -- more than the bank's market value -- on futures in European equity markets. It also said he did not appear to have profited personally from the trades.
10) Since the case broke, Societe Generale has faced questions about its future, amid speculation it could be bought out or broken up, and about how Kerviel's activities went unnoticed or ignored.
11) Judges on Friday were to weigh a request from prosecutors that Kerviel be put back in custody while the investigation continues. The judges could rule immediately Friday on the prosecutors' request or delay their decision to a later date.
12) A spokeswoman for the prosecutors' office, Ulrika Weiss, said Kerviel should be held in prison to ensure that he cannot contact any accomplices, if he had them.
13) 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.
French police question second trader over massive losses at Societe Generale
(APW_ENG_20080208.0591)
1) French police were holding a second person for questioning Friday in a probe of massive losses at bank Societe Generale, a judicial official said.
2) The person, from a brokerage part-owned by Societe Generale, was taken into custody on Thursday and was still being held Friday, said the official, who refused to be identified discussing the sensitive case.
French police question second trader over massive losses at Societe Generale
(APW_ENG_20080208.0632)
1) French police were holding a second person for questioning Friday in a probe of massive losses at bank Societe Generale, a judicial official said.
2) The person, from a brokerage part-owned by Societe Generale, was taken into custody on Thursday and was still being held Friday, said the official, who refused to be identified discussing the sensitive case. The official gave no other details. Police refused to comment.
3) The daily Le Monde said the broker was being questioned about his relationship with Jerome Kerviel, the futures trader accused by Societe Generale of massive unauthorized bets on European markets that the bank said cost nearly euro5 billion (more than $7 billion) to unwind.
4) Le Monde said police suspect the new trader being held was aware of Kerviel's activities. It said the broker was taken into custody after a search of his company offices on Thursday.
5) Societe Generale has said it believes that Kerviel had no accomplices. Spokespeople for the bank, one of France's biggest, did not immediately return calls seeking comment on Le Monde's report.
6) Kerviel was in custody for two days last month, and judges filed preliminary charges against him but released him during the investigation.
7) Joelle Rosello, a Societe Generale spokeswoman, confirmed that an employee of Newedge, a 50-percent owned affiliate, was in police custody in the Kerviel probe. "We are cooperating closely with police," said Rosello.
8) Le Monde said new evidence provided by Societe Generale for the legal probe into Kerviel's actions included a message sent by the second trader to Kerviel over the bank's computer system. The newspaper said the message, sent last Nov. 30, read: "You have done nothing illegal in terms of the law."
9) Societe Generale announced Jan. 24 that it lost euro4.82 billion (US$7.09 billion) in cleaning up unauthorized transactions by 31-year-old Kerviel. It said Kerviel overstepped his authority and bet euro50 billion euros ($73 billion) -- more than the bank's market value -- on futures in European equity markets. It also said he did not appear to have profited personally from the trades.
10) Since the case broke, Societe Generale has faced questions about its future, amid speculation it could be bought out or broken up, and about how Kerviel's activities went unnoticed or ignored.
11) Judges on Friday were to weigh a request from prosecutors that Kerviel be jailed while the investigation continues. The judges could rule immediately Friday on the prosecutors' request or delay their decision to a later date.
12) A spokeswoman for the prosecutors' office, Ulrika Weiss, said Kerviel should be held in prison to ensure that he cannot contact any accomplices, if he had them.
13) 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.
French police question second trader over massive losses at Societe Generale
(APW_ENG_20080208.0850)
1) France's legal probe into massive losses at bank Societe Generale broadened on Friday, with police holding a brokerage employee who reportedly was in contact with the trader at the heart of the scandal.
2) The police questioning of the employee from a brokerage arm of Societe Generale came as judges weighed whether to send the original trader, Jerome Kerviel, to jail while the investigation continues.
3) Societe Generale, one of France's biggest banks, has previously said that Kerviel appeared to have acted alone when he made massive unauthorized bets on European futures markets that the bank said cost it a staggering nearly euro5 billion (more than $7 billion) to unwind.
4) But the daily Le Monde reported Friday that the bank has turned over new evidence for the probe, including a message sent by the broker now in custody to Kerviel over the bank's computer system.
5) The message, sent last Nov. 30, read: "You have done nothing illegal in terms of the law," the newspaper said.
6) The employee from brokerage Newedge, a 50-50 joint venture between Societe Generale and bank Calyon, was taken into custody on Thursday and was still being held Friday, said a judicial official who refused to be identified discussing the sensitive case.
7) Joelle Rosello, a Societe Generale spokeswoman, confirmed that the employee was in custody. "We are cooperating closely with police," she said.
8) Le Monde said Kerviel passed some trades through the brokerage, and that police suspect that the brokerage employee was aware of Kerviel's activities. It said the brokerage was searched Thursday.
9) Kerviel was in custody for two days last month, and judges filed preliminary charges against him but released him during the investigation.
10) Societe Generale announced Jan. 24 that it lost euro4.82 billion (US$7.09 billion) in cleaning up unauthorized transactions by 31-year-old Kerviel. It said Kerviel overstepped his authority and bet euro50 billion euros ($73 billion) -- more than the bank's market value -- on futures in European equity markets. It also said he did not appear to have profited personally from the trades.
11) Since the case broke, Societe Generale has faced questions about its future, amid speculation it could be bought out or broken up, and about how Kerviel's activities went unnoticed or ignored.
12) Judges on Friday were weighing a request from prosecutors that Kerviel be jailed while the investigation continues. The judges could rule immediately Friday on the request or delay their decision to a later date.
13) A spokeswoman for the prosecutors' office, Ulrika Weiss, said Kerviel should be held in prison to ensure that he cannot contact accomplices, if he had any.
14) 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.
French court places trader in Societe General scandal in provisional detention
(APW_ENG_20080208.0940)
1) A Paris court on Friday ordered French trader Jerome Kerviel to be jailed while investigations continue into massive losses at Societe Generale.
2) The Paris prosecutor's office had requested that Kerviel go behind bars. He faces preliminary charges of forgery, breach of trust and unauthorized computer activity.
French court places trader in Societe General scandal behind bars
(APW_ENG_20080208.1012)
1) A Paris court ordered French trader Jerome Kerviel on Friday to be jailed while investigations continue into billions of euros (dollars) in losses he allegedly caused at Societe Generale bank.
2) Also Friday, the legal probe into the case broadened, with police holding a brokerage employee who reportedly had been in contact with Kerviel, a 31-year-old futures trader.
3) The judges' decision to jail Kerviel came after prosecutors said they were concerned he might contact accomplices, if he had any, jeopardizing what promises to be a long and complex probe.
4) Judges had allowed Kerviel to go free last month, after his lawyer argued he did not pose a flight risk.
5) News that police had arrested a second person, an employee at a brokerage arm of Societe Generale, again raised the question of whether Kerviel acted alone.
6) Societe Generale, one of France's biggest banks, has said Kerviel did not appear to have accomplices when he made massive unauthorized bets on European futures markets that the bank said cost it nearly euro5 billion (more than US$7 billion) to unwind.
7) But the daily newspaper Le Monde reported Friday that the bank has turned over new evidence, including a message sent to Kerviel through the bank's computer system by the broker now in custody.
8) The message, sent Nov. 30, read: "You have done nothing illegal in terms of the law," the newspaper said.
9) The employee, who worked at Newedge, a 50-50 joint venture between Societe Generale and Calyon bank, was taken into custody Thursday and was still being held Friday, said a judicial official who refused to be identified because of the sensitivity of the case.
10) Joelle Rosello, a Societe Generale spokeswoman, confirmed the employee was in custody. "We are cooperating closely with police," she said.
11) Le Monde said Kerviel passed some trades through the brokerage, and that police suspect that the brokerage employee was aware of Kerviel's activities. It said the brokerage was searched Thursday.
12) Societe Generale announced Jan. 24 that it lost euro4.82 billion (US$7.09 billion) in cleaning up Kerviel's unauthorized transactions. It said Kerviel overstepped his authority and bet euro50 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.
13) Since new of the case broke, Societe Generale has faced questions about its future. There has been speculation it could be bought out or broken up. In addition, there have been questions about how Kerviel's activities went unnoticed.
14) 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.
French court places trader in Societe General scandal behind bars
(APW_ENG_20080208.1109)
1) A Paris court ordered French trader Jerome Kerviel on Friday to be jailed while investigations continue into billions of euros (dollars) in losses he allegedly caused at Societe Generale bank.
2) Also Friday, the legal probe into the case broadened, with police holding a brokerage employee who had been in contact with Kerviel, a 31-year-old futures trader.
3) The judges' decision to jail Kerviel came after prosecutors said they were concerned he might contact accomplices, if he had any, jeopardizing what promises to be a long and complex probe. Kerviel plans to appeal, said lawyer Raphael Colas, who works with Kerviel's attorney Elisabeth Meyer.
4) Judges had allowed Kerviel to go free last month, after his lawyer argued he did not pose a flight risk.
5) News that police had arrested a second person, an employee at a brokerage arm of Societe Generale, again raised the question of whether Kerviel acted alone.
6) Societe Generale, one of France's biggest banks, has said Kerviel did not appear to have accomplices when he made massive unauthorized bets on European futures markets that the bank said cost it nearly euro5 billion (more than US$7 billion) to unwind.
7) A judicial official said the bank has turned over new evidence, including a message sent to Kerviel through the bank's computer system by the broker now in custody.
8) 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.
9) The employee, who worked at Newedge, a 50-50 joint venture between Societe Generale and Calyon bank, was taken into custody Thursday and was still being held Friday evening, said the judicial official, who refused to be identified because of the sensitivity of the case. Police investigators also searched the Newedge office on Paris' Champs-Elysées in the case, the official said.
10) Joelle Rosello, a Societe Generale spokeswoman, confirmed the employee was in custody. "We are cooperating closely with police," she said.
11) Le Monde said Kerviel passed some trades through the brokerage, and that police suspect that the brokerage employee was aware of Kerviel's activities. It said the brokerage was searched Thursday.
12) Societe Generale announced Jan. 24 that it lost euro4.82 billion (US$7.09 billion) in cleaning up Kerviel's unauthorized transactions. It said Kerviel overstepped his authority and bet euro50 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.
13) Since new of the case broke, Societe Generale has faced questions about its future. There has been speculation it could be bought out or broken up. In addition, there have been questions about how Kerviel's activities went unnoticed.
14) 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.
French court places trader in Societe General scandal behind bars
(APW_ENG_20080208.1110)
1) A Paris court ordered French trader Jerome Kerviel on Friday to be jailed while investigations continue into billions of euros (dollars) in losses he allegedly caused at Societe Generale bank.
2) Also Friday, the legal probe into the case broadened, with police holding a brokerage employee who had been in contact with Kerviel, a 31-year-old futures trader.
3) The judges' decision to jail Kerviel came after prosecutors said they were concerned he might contact accomplices, if he had any, jeopardizing what promises to be a long and complex probe. Kerviel plans to appeal, said lawyer Raphael Colas, who works with Kerviel's attorney Elisabeth Meyer.
4) Judges had allowed Kerviel to go free last month, after his lawyer argued he did not pose a flight risk.
5) News that police had arrested a second person, an employee at a brokerage arm of Societe Generale, again raised the question of whether Kerviel acted alone.
6) Societe Generale, one of France's biggest banks, has said Kerviel did not appear to have accomplices when he made massive unauthorized bets on European futures markets that the bank said cost it nearly euro5 billion (more than US$7 billion) to unwind.
7) A judicial official said the bank has turned over new evidence, including a message sent to Kerviel through the bank's computer system by the broker now in custody.
8) 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.
9) The employee, who worked at Newedge, a 50-50 joint venture between Societe Generale and Calyon bank, was taken into custody Thursday and was still being held Friday evening, said the judicial official, who refused to be identified because of the sensitivity of the case. Police investigators also searched the Newedge office on Paris' Champs-Elysees in the case, the official said.
10) Joelle Rosello, a Societe Generale spokeswoman, confirmed the employee was in custody. "We are cooperating closely with police," she said.
11) Le Monde said Kerviel passed some trades through the brokerage, and that police suspect that the brokerage employee was aware of Kerviel's activities. It said the brokerage was searched Thursday.
12) Societe Generale announced Jan. 24 that it lost euro4.82 billion (US$7.09 billion) in cleaning up Kerviel's unauthorized transactions. It said Kerviel overstepped his authority and bet euro50 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.
13) Since new of the case broke, Societe Generale has faced questions about its future. There has been speculation it could be bought out or broken up. In addition, there have been questions about how Kerviel's activities went unnoticed.
14) 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.
French court places trader in Societe General scandal behind bars
(APW_ENG_20080208.1252)
1) 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 brought into custody.
2) 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."
3) 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 euro5 billion (more than US$7 billion) to unwind.
4) 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.
5) 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.
6) 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 possibly went unnoticed. The bank has said repeatedly he did not appear to have had accomplices.
7) But the bank's lawyer, Jean Veil, raised the possibility Friday that Kerviel only claimed to have acted alone to avoid being jailed.
8) Christophe Reille, a spokesman for Kerviel, described the trader as "serene" after the judges sent him to jail.
9) "He faced up to it," Reille said. "I saw him walk past me, with the gendarmes. He was very natural."
10) 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.
11) 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.
12) 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.
13) 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.
14) Joelle Rosello, a Societe Generale spokeswoman, confirmed the employee was in custody. "We are cooperating closely with police," she said.
15) Societe Generale announced Jan. 24 that it lost euro4.82 billion (US$7.09 billion) in cleaning up Kerviel's unauthorized transactions. It said Kerviel overstepped his authority and bet euro50 billion (US$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.
16) Since new of the case broke, there has been speculation that Societe Generale could be bought out or broken up.
17) 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.
2008-02-09
French court places trader in Societe General scandal behind bars
(APW_ENG_20080209.0062)
1) A Paris court sent French trader Jerome Kerviel behind bars, 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 brought into custody.
2) 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."
3) 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 euro5 billion (more than US$7 billion) to unwind.
4) The 31-year-old futures trader was sent Friday 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.
5) 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.
6) 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 possibly went unnoticed. The bank has said repeatedly he did not appear to have had accomplices.
7) But the bank's lawyer, Jean Veil, raised the possibility Friday that Kerviel only claimed to have acted alone to avoid being jailed.
8) Christophe Reille, a spokesman for Kerviel, described the trader as "serene" after the judges sent him to jail.
9) "He faced up to it," Reille said. "I saw him walk past me, with the gendarmes. He was very natural."
10) 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.
11) 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.
12) 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.
13) 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.
14) Joelle Rosello, a Societe Generale spokeswoman, confirmed the employee was in custody. "We are cooperating closely with police," she said.
15) Societe Generale announced Jan. 24 that it lost euro4.82 billion (US$7.09 billion) in cleaning up Kerviel's unauthorized transactions. It said Kerviel overstepped his authority and bet euro50 billion (US$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.
16) Since news of the case broke, there has been speculation that Societe Generale could be bought out or broken up.
17) 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.
Societe Generale employee released without charge after questioning about accused trader
(APW_ENG_20080209.0552)
1) A Societe Generale bank employee was released without charge Saturday after two days of questioning about jailed trader Jerome Kerviel.
2) The employee, also a trader at the ban, was taken into custody on Thursday for questioning by judges specializing in financial affairs, said Isabelle Montagne, a spokeswoman for the Paris prosecutors' office.
3) She declined to identify the employee.
4) Kerviel was arrested and jailed Friday in connection with billions of euros in losses at the troubled French bank.
Societe Generale employee released without charge after questioning about accused trader
(APW_ENG_20080209.0576)
1) A Societe Generale bank employee was released without charge Saturday after two days of questioning about the case of jailed trader Jerome Kerviel.
2) The employee, also a trader, was taken into custody Thursday for questioning by judges specializing in financial affairs, said Isabelle Montagne, a spokeswoman for the Paris prosecutors' office.
3) "He has left; he's free; he was not presented with preliminary charges," Montagne told The Associated Press. She declined to identify the brokerage employee.
4) Societe Generale announced Jan. 24 that it lost euro4.82 billion (US$7.09 billion) in cleaning up Kerviel's unauthorized transactions. It said Kerviel overstepped his authority and bet euro50 billion (US$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.
5) Societe Generale, one of France's biggest banks, has faced uncertainty over its future since the scandal broke, and questions about how Kerviel's massive trades possibly went unnoticed.
6) Investigators want to know whether Kerviel acted alone, and if so, what explained a message a brokerage employee sent him before the case broke, saying: "You have done nothing illegal in terms of the law."
7) The bank, prosecutors and France's finance minister have said Kerviel appeared to have acted without help. The 31-year-old trader was sent Friday to La Sante jail in Paris on preliminary charges of breach of trust, forgery and unauthorized computer activity. Those preliminary charges allow judges time to further investigate, and decide whether to send the case to trial.
8) The employee worked at Newedge, a 50-50 joint venture between Societe Generale and Calyon bank, according a judicial official who spoke on condition that her name not be used. Kerviel passed some of his trades through the brokerage, the official said.
9) The investigation turned up a message that the employee sent to Kerviel through the bank's computer system on Nov. 30. It said: "You have done nothing illegal in terms of the law," the official said, confirming a report that first appeared in Le Monde newspaper.
Societe Generale employee released without charge after questioning about accused trader
(APW_ENG_20080209.0658)
1) A Societe Generale bank employee was released without charge Saturday after two days of questioning about the case of jailed trader Jerome Kerviel.
2) The employee, also a trader, was freed after being questioned Saturday by judges specializing in financial affairs, said Isabelle Montagne, a spokeswoman for the Paris prosecutors' office. He had been detained since Thursday.
3) "He has left; he's free; he was not presented with preliminary charges," Montagne told The Associated Press. She declined to identify the brokerage employee.
4) Societe Generale announced Jan. 24 that it lost euro4.82 billion (US$7.09 billion) in cleaning up Kerviel's unauthorized transactions. It said Kerviel overstepped his authority and bet euro50 billion (US$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.
5) Societe Generale, one of France's biggest banks, has faced uncertainty over its future since the scandal broke, and questions about how Kerviel's massive trades possibly went unnoticed.
6) Investigators want to know whether Kerviel acted alone, and if so, what explained a message a brokerage employee sent him before the case broke, saying: "You have done nothing illegal in terms of the law."
7) The bank, prosecutors and France's finance minister have said Kerviel appeared to have acted without help. The 31-year-old trader was sent Friday to La Sante jail in Paris on preliminary charges of breach of trust, forgery and unauthorized computer activity. Those preliminary charges allow judges time to further investigate, and decide whether to send the case to trial.
8) The employee worked at Newedge, a 50-50 joint venture between Societe Generale and Calyon bank, according a judicial official who spoke on condition that her name not be used. Kerviel passed some of his trades through the brokerage, the official said.
9) The investigation turned up a message that the employee sent to Kerviel through the bank's computer system on Nov. 30. It said: "You have done nothing illegal in terms of the law," the official said, confirming a report that first appeared in Le Monde newspaper.
2008-02-11
SocGen launches heavily discounted capital hike
(APW_ENG_20080211.0359)
1) French bank Societe Generale SA on Monday launched a heavily discounted euro5.5 billion (nearly US$8 billion) rights issue aimed at filling a capital gap it says was caused by trader Jerome Kerviel, while also lifting its net profit forecast for 2007.
2) The bank said net profit for 2007 is expected to be euro947 million (US$1.37 billion), although the figure is subject to a continued investigation into activities at SocGen investment bank and may be revised again.
3) The rights issue came as the bank works to address fallout from Kerviel's massive unauthorized bets on European futures markets. The bank says it cost nearly 5 billion euros (more than $7 billion) to unwind Kerviel's positions.
4) Societe Generale said in January that the trading loss would wipe out the bulk of its earnings for 2007 and that it expected net profit in the range of euro600 million (US$871 million) to euro800 million (US$1.16 billion).
5) However, write-downs linked to fallout from the U.S. subprime crisis were higher than previously stated at euro2.6 billion (US$3.77 billion) compared with the euro2.05 billion (US$2.98 billion) announced in January.
6) The rights issue is needed to help reinforce the bank's finances in the wake of the trading scandal and is being offered at a heavy discount to the current share price, with shareholders entitled to four subscription rights for each new share at euro47.50 (US$68.94) each -- almost 40 percent below SocGen's Friday closing share price of euro77.72 (US$112.80).
7) The subscription period will run from Feb. 21 to Feb. 29, the bank said.
8) Societe Generale also announced a number of new targets following an efficiency study launched last year. It said it aims to lift gross operating profit by euro1 billion a year by 2010 by rationalizing its activities.
9) Return on equity should be between 19 percent and 20 percent in 2009, and it intends maintaining its dividend payout ratio at 45 percent from 2008 to 2010, the bank said.
10) Kerviel, a 31-year-old futures trader, was sent to La Sante jail outside Paris on Friday pending further investigation into his case.
SocGen seeks to raise $8 billion in heavily discounted capital hike
(APW_ENG_20080211.0495)
1) French bank Societe Generale SA hopes to raise euro5.5 billion (nearly US$8 billion) in a heavily discounted rights issue launched Monday, designed to fill a gap in funds blamed on a massive trading scandal.
2) France's second largest bank said it will offer new shares at euro47.50 (US$68.94) in a rights issue -- almost 40 percent below SocGen's Friday closing share price of euro77.72 (US$112.80).
3) Existing shareholders will have preferential subscription rights and be able to buy one new share for each four shares held.
4) The rights issue is needed to "strengthen the company's equity" after massive unauthorized bets by trader Jerome Kerviel on European futures markets, SocGen said.
5) The bank says it cost nearly 5 billion euros (more than $7 billion) to unwind Kerviel's positions. A report by the French finance ministry faulted internal controls at the bank.
6) Societe Generale also announced write-downs of euro2.6 billion (US$3.77 billion) related to the fallout from the U.S. mortgage crisis, bigger than the 2.05 billion (US$2.98 billion) announced in January. The bank said the January figure relates only to the fourth quarter and did not include residential mortgage-backed securities.
7) In a prospectus for investors, Societe Generale also said net profit for 2007 was euro947 million (US$1.37 billion), more than euro600 million (US$871 million) to euro800 million (US$1.16 billion) announced in January.
8) The subscription period will run from Feb. 21 to Feb. 29 and is being managed by JPMorgan Chase, Morgan Stanley and Societe Generale Corporate & Investment Banking, the bank said.
9) Kerviel, a 31-year-old futures trader, was sent to La Sante jail outside Paris on Friday pending further investigation into his case.
10) The bank said it intends to "draw lessons from recent events and strengthen our control procedures and anti-fraud measures" in the first half of the year in its corporate and investment banking division.
11) "Very clearly, certain mechanisms of internal controls of Societe Generale did not function, and those that functioned were not always followed by appropriate modifications," French Finance Minister Christine Lagarde said last week after submitting a report into the trading scandal.
12) Societe Generale also announced a number of new targets following an efficiency study launched last year which it said will lift gross operating profit by euro1 billion a year by 2010.
SocGen seeks to raise nearly $8 billion in heavily discounted capital hike
(APW_ENG_20080211.0734)
1) French bank Societe Generale SA hopes to raise euro5.5 billion (nearly US$8 billion) in a heavily discounted rights issue launched Monday, designed to fill a gap in funds blamed on a massive trading scandal.
2) France's second largest bank said it will offer new shares at euro47.50 (US$68.94) in a rights issue -- almost 40 percent below SocGen's Friday closing share price of euro77.72 (US$112.80).
3) Existing shareholders will have preferential subscription rights and be able to buy one new share for each four shares held.
4) The rights issue is needed to "strengthen the company's equity" after massive unauthorized bets by trader Jerome Kerviel on European futures markets, Societe Generale said.
5) "It's crucial," said Axel Pierron, an analyst with research house Celent in Paris. The discount shows "the bank wants the capital increase to succeed."
6) Societe Generale says it cost nearly euro5 billion (more than $7 billion) to unwind Kerviel's positions. A report by the French finance ministry faulted internal controls at the bank.
7) The capital increase will allow the group's tier 1 ratio, a measure of financial strength, to be restored to 8 percent, the bank said.
8) Societe Generale also announced write-downs of euro2.6 billion (US$3.77 billion) related to the fallout from the U.S. mortgage crisis, bigger than the 2.05 billion (US$2.98 billion) announced in January. The bank said the January figure relates only to the fourth quarter and did not include residential mortgage-backed securities.
9) In a prospectus for investors, Societe Generale also said net profit for 2007 was euro947 million (US$1.37 billion), more than the euro600 million (US$871 million) to euro800 million (US$1.16 billion) announced in January.
10) The subscription period will run from Feb. 21 to Feb. 29 and is being managed by JPMorgan Chase, Morgan Stanley and Societe Generale's own corporate and investment banking division, the bank said.
11) Meanwhile Kerviel, a 31-year-old futures trader, was sent to La Sante jail outside Paris on Friday pending further investigation into his case.
12) The bank said it intends to "draw lessons from recent events and strengthen our control procedures and anti-fraud measures" in the first half of the year in its corporate and investment banking division.
13) "Very clearly, certain mechanisms of internal controls of Societe Generale did not function, and those that functioned were not always followed by appropriate modifications," French Finance Minister Christine Lagarde said last week after submitting a report into the trading scandal.
14) Since Kerviel's actions came to light, Pierron said major banks worldwide have been reviewing their security and control systems "because they know very well at a given moment they also could have a weakness."
15) Chief Executive Daniel Bouton, whose resignation has so far been refused by the board, will keep his job at least until after the capital increase and possibly beyond, Pierron said.
16) Bouton provides a "certain stability" to the bank and there are few candidates of his caliber, he said.
17) Societe Generale also announced a number of new targets following an efficiency study launched last year which it said will lift gross operating profit by euro1 billion a year by 2010.
SocGen seeks to raise nearly $8 billion in heavily discounted capital hike
(APW_ENG_20080211.0974)
1) French bank Societe Generale SA hopes to raise euro5.5 billion (nearly US$8 billion) in fresh capital through a heavily discounted rights issue launched Monday, designed to fill a gap in funds blamed on a massive trading scandal.
2) In a bid to ensure the "biggest success possible," France's second largest bank said it will offer new shares to existing shareholders at euro47.50 (US$68.94) in a rights issue -- almost 40 percent below SocGen's Friday closing share price of euro77.72 (US$112.80).
3) The rights issue is needed to "strengthen the company's equity" after massive unauthorized bets by trader Jerome Kerviel on European futures markets, SocGen said.
4) "It's crucial," said Axel Pierron, an analyst with research house Celent in Paris. The discount shows "the bank wants the capital increase to succeed."
5) Societe Generale says it cost nearly euro5 billion (more than $7 billion) to unwind Kerviel's positions. A report by the French Finance Ministry faulted internal controls at the bank.
6) Existing shareholders will have preferential subscription rights and be able to buy one new SocGen share for each four shares held.
7) They can also trade their preferential rights during the subscription period for a starting price of euro5.90 (US$8.58). New shareholders must purchase four rights to buy one new share, bringing the theoretical cost of SocGen shares after the capital increase to euro71 (US$103.25).
8) "The idea is that existing shareholders follow us," Chief Financial Officer Frederic Oudea said in a conference call. "We want this to be the biggest success possible."
9) Shares on Monday fell 4.6 percent to euro74.14 (US$107.81) giving the bank a market value of euro34.6 billion (US$50.32 billion). In the past 12 months the bank has lost nearly half of its value.
10) The capital increase will allow the group's tier 1 ratio, a measure of financial strength, to be restored to 8 percent, the bank said. It will also use the cash to maintain lending in France and to fund growth in countries including Russia, Brazil, India and central and eastern Europe.
11) Societe Generale also announced write-downs of euro2.6 billion (US$3.77 billion) related to the fallout from the U.S. mortgage crisis, bigger than the 2.05 billion (US$2.98 billion) announced in January. The bank said the January figure relates only to the fourth quarter and did not include residential mortgage-backed securities.
12) In a prospectus for investors, Societe Generale also said net profit for 2007 was euro947 million (US$1.37 billion), more than the euro600 million (US$871 million) to euro800 million (US$1.16 billion) announced in January.
13) The subscription period will run from Feb. 21 to Feb. 29 and is being managed by JPMorgan Chase, Morgan Stanley and Societe Generale's own corporate and investment banking division, the bank said.
14) Meanwhile Kerviel, a 31-year-old futures trader, was sent to La Sante jail outside Paris on Friday pending further investigation into his case.
15) The bank said it intends to "draw lessons from recent events and strengthen our control procedures and anti-fraud measures" in the first half of the year in its corporate and investment banking division.
16) "Very clearly, certain mechanisms of internal controls of Societe Generale did not function, and those that functioned were not always followed by appropriate modifications," French Finance Minister Christine Lagarde said last week after submitting a report into the trading scandal.
17) Jean-Pierre Mustier, head of the company's corporate and investment banking arm, said in a conference call a number of measures have been taken to strengthen security including the introduction of biometric requirements in place of passwords. Kerviel is accused of using other employees passwords to circumvent the bank's controls.
18) Since Kerviel's actions came to light, Pierron said major banks worldwide have been reviewing their security and control systems "because they know very well at a given moment they also could have a weakness."
19) The bank has become subject of takeover rumors since the affair, with cross-town rival BNP Paribas mulling a bid Both Mustier and Oudea declined to comment on potential bids.
20) Chief Executive Daniel Bouton, whose resignation has so far been refused by the board, will keep his job at least until after the capital increase and possibly beyond, Pierron said.
21) Bouton provides a "certain stability" to the bank and there are few candidates of his caliber, he said.
22) Societe Generale also announced a number of new targets following an efficiency study launched last year which it said will lift gross operating profit by euro1 billion a year by 2010.
SocGen seeks to raise nearly $8 billion in heavily discounted capital hike
(APW_ENG_20080211.1309)
1) Societe Generale SA, reeling from the biggest-ever loss blamed on a single trader, launched a heavily discounted rights issue on Monday, seeking euro5.5 billion (nearly US$8 billion) to restore its position as a top-tier bank.
2) The fund-raising comes as reports suggest that Jerome Kerviel, the trader at the heart of the scandal, exchanged regular computer text messages with a broker about his unauthorized trades. The broker was questioned by financial police last week about his contacts with Kerviel.
3) Monday's move comes less than three weeks after the bank said Kerviel's unauthorized trades cost nearly euro5 billion (more than US$7 billion) to unwind. The bank is seeking new capital to boost its financial standing and fund future growth.
4) The bank said it would offer new shares to existing shareholders at euro47.50 (US$68.94) in a rights issue -- almost 40 percent below Societe Generale's Friday closing share price of euro77.72 (US$112.80).
5) The discount shows "the bank wants the capital increase to succeed," said Axel Pierron, an analyst with research house Celent in Paris.
6) Existing shareholders will have preferential subscription rights and be able to buy one new SocGen share for each four shares held.
7) They can also trade their preferential rights during the subscription period for a starting price of euro5.90 (US$8.58). New shareholders must purchase four rights to buy one new share, bringing the theoretical cost of SocGen shares after the capital increase to euro71 (US$103.25).
8) "The idea is that existing shareholders follow us," Chief Financial Officer Frederic Oudea said in a conference call. "We want this to be the biggest success possible."
9) Shares on Monday closed down 4.02 percent at euro74.59 (US$108.47), giving the bank a market value of euro34.8 billion (US$50.32 billion). In the past 12 months the bank has lost nearly half of its value.
10) The capital increase will allow the group's tier 1 ratio, a measure of financial strength, to be restored to 8 percent, the bank said. It will also use the cash to maintain lending in France and to fund growth in countries including Russia, Brazil, India and central and eastern Europe.
11) The subscription period will run from Feb. 21 to Feb. 29 and is being managed by JPMorgan Chase, Morgan Stanley and Societe Generale's own corporate and investment banking division, the bank said.
12) The bank said it intends to "draw lessons from recent events and strengthen our control procedures and anti-fraud measures" in the first half of the year in its corporate and investment banking division.
13) A report by the French Finance Ministry faulted the bank's controls for not halting the unauthorized activity by trader Kerviel.
14) Jean-Pierre Mustier, head of the company's corporate and investment banking arm, said in a conference call a number of measures have been taken to strengthen security including monitoring nominal, and not just net, exposure of traders and the introduction of biometric requirements in place of passwords. Kerviel is accused of using other employees' passwords to circumvent the bank's controls.
15) Kerviel was sent to La Sante jail outside Paris on Friday pending further investigation into his case.
16) A report on the Web site of French newsmagazine Nouvel Observateur over the weekend detailed communication between Kerviel and brokerage employee Moussa Bakir, conducted via internal messaging on a Reuters financial information terminal.
17) Bakir worked at Newedge, a 50-50 joint venture between Societe Generale and Calyon bank, through which Kerviel passed some of his trades, judicial officials have said. Judicial officials would not confirm the authenticity of the extracts.
18) A lawyer for the bank, Jean Veil, said investigators are speaking with several Societe Generale employees but insisted, "It is much too early to have a definite clear opinion on the assistance Mr. Kerviel may have received from anybody."
19) Since Kerviel's actions came to light, analyst Pierron said major banks worldwide have been reviewing their security and control systems "because they know very well at a given moment they also could have a weakness."
20) Societe Generale bank has become the subject of takeover rumors since the affair, with cross-town rival BNP Paribas mulling a bid. Both Mustier and Oudea declined to comment on potential bids.
21) Chief Executive Daniel Bouton, whose resignation has so far been refused by the board, will keep his job at least until after the capital increase and possibly beyond, Pierron said.
22) Bouton provides a "certain stability" to the bank, and there are few candidates of his caliber, he said.
23) Societe Generale also announced write-downs Monday of euro2.6 billion (US$3.8 billion) related to the fallout from the U.S. mortgage crisis -- bigger than the euro2.05 billion (US$2.98 billion) announced in January. The bank said the January figure relates only to the fourth quarter and did not include residential mortgage-backed securities.
24) In a prospectus for investors, Societe Generale also said net profit for 2007 was euro947 million (US$1.37 billion), more than the euro600 million (US$871 million) to euro800 million (US$1.16 billion) announced in January.
25) Societe Generale also announced a number of new targets following an efficiency study launched last year which it said will lift gross operating profit by euro1 billion a year by 2010.
SocGen seeks to raise nearly US$8 billion in heavily discounted capital hike
(APW_ENG_20080211.1353)
1) Societe Generale SA, reeling from the biggest-ever loss blamed on a single trader, launched a heavily discounted rights issue on Monday, seeking euro5.5 billion (nearly US$8 billion) to restore its position as a top-tier bank.
2) The fund-raising comes as reports suggest that Jerome Kerviel, the trader at the heart of the scandal, exchanged regular computer text messages with a broker about his unauthorized trades. The broker was questioned by financial police last week about his contacts with Kerviel.
3) Monday's move comes less than three weeks after the bank said Kerviel's unauthorized trades cost nearly euro5 billion (more than US$7 billion) to unwind. The bank is seeking new capital to boost its financial standing and fund future growth.
4) The bank said it would offer new shares to existing shareholders at euro47.50 (US$68.94) in a rights issue -- almost 40 percent below Societe Generale's Friday closing share price of euro77.72 (US$112.80).
5) The discount shows "the bank wants the capital increase to succeed," said Axel Pierron, an analyst with research house Celent in Paris.
6) Existing shareholders will have preferential subscription rights and be able to buy one new SocGen share for each four shares held.
7) They can also trade their preferential rights during the subscription period for a starting price of euro5.90 (US$8.58). New shareholders must purchase four rights to buy one new share, bringing the theoretical cost of SocGen shares after the capital increase to euro71 (US$103.25).
8) "The idea is that existing shareholders follow us," Chief Financial Officer Frederic Oudea said in a conference call. "We want this to be the biggest success possible."
9) Shares on Monday closed down 4.02 percent at euro74.59 (US$108.47), giving the bank a market value of euro34.8 billion (US$50.32 billion). In the past 12 months the bank has lost nearly half of its value.
10) The capital increase will allow the group's tier 1 ratio, a measure of financial strength, to be restored to 8 percent, the bank said. It will also use the cash to maintain lending in France and to fund growth in countries including Russia, Brazil, India and central and eastern Europe.
11) The subscription period will run from Feb. 21 to Feb. 29 and is being managed by JPMorgan Chase, Morgan Stanley and Societe Generale's own corporate and investment banking division, the bank said.
12) The bank said it intends to "draw lessons from recent events and strengthen our control procedures and anti-fraud measures" in the first half of the year in its corporate and investment banking division.
13) A report by the French Finance Ministry faulted the bank's controls for not halting the unauthorized activity by trader Kerviel.
14) Jean-Pierre Mustier, head of the company's corporate and investment banking arm, said in a conference call a number of measures have been taken to strengthen security including monitoring nominal, and not just net, exposure of traders and the introduction of biometric requirements in place of passwords. Kerviel is accused of using other employees' passwords to circumvent the bank's controls.
15) Kerviel was sent to La Sante prison, in southern Paris, on Friday pending further investigation into his case.
16) A report on the Web site of French newsmagazine Nouvel Observateur over the weekend detailed communication between Kerviel and brokerage employee Moussa Bakir, conducted via internal messaging on a Reuters financial information terminal.
17) Bakir worked at Newedge, a 50-50 joint venture between Societe Generale and Calyon bank, through which Kerviel passed some of his trades, judicial officials have said. Judicial officials would not confirm the authenticity of the extracts.
18) A lawyer for the bank, Jean Veil, said investigators are speaking with several Societe Generale employees but insisted, "It is much too early to have a definite clear opinion on the assistance Mr. Kerviel may have received from anybody."
19) Since Kerviel's actions came to light, analyst Pierron said major banks worldwide have been reviewing their security and control systems "because they know very well at a given moment they also could have a weakness."
20) Societe Generale bank has become the subject of takeover rumors since the affair, with cross-town rival BNP Paribas mulling a bid. Both Mustier and Oudea declined to comment on potential bids.
21) Chief Executive Daniel Bouton, whose resignation has so far been refused by the board, will keep his job at least until after the capital increase and possibly beyond, Pierron said.
22) Bouton provides a "certain stability" to the bank, and there are few candidates of his caliber, he said.
23) Societe Generale also announced write-downs Monday of euro2.6 billion (US$3.8 billion) related to the fallout from the U.S. mortgage crisis -- bigger than the euro2.05 billion (US$2.98 billion) announced in January. The bank said the January figure relates only to the fourth quarter and did not include residential mortgage-backed securities.
24) In a prospectus for investors, Societe Generale also said net profit for 2007 was euro947 million (US$1.37 billion), more than the euro600 million (US$871 million) to euro800 million (US$1.16 billion) announced in January.
25) Societe Generale also announced a number of new targets following an efficiency study launched last year which it said will lift gross operating profit by euro1 billion a year by 2010.
2008-02-12
SocGen seeks to raise nearly US$8 billion in heavily discounted capital hike
(APW_ENG_20080212.0059)
1) Societe Generale SA, reeling from the biggest-ever loss blamed on a single trader, launched a heavily discounted rights issue, seeking euro5.5 billion (nearly US$8 billion) to restore its position as a top-tier bank.
2) The fund-raising comes as reports suggest that Jerome Kerviel, the trader at the heart of the scandal, exchanged regular computer text messages with a broker about his unauthorized trades. The broker was questioned by financial police last week about his contacts with Kerviel.
3) Less than three weeks ago, the bank said Kerviel's unauthorized trades cost nearly euro5 billion (more than US$7 billion) to unwind. The bank is seeking new capital to boost its financial standing and fund future growth.
4) The bank said Monday it would offer new shares to existing shareholders at euro47.50 (US$68.94) in a rights issue -- almost 40 percent below Societe Generale's Friday closing share price of euro77.72 (US$112.80).
5) The discount shows "the bank wants the capital increase to succeed," said Axel Pierron, an analyst with research house Celent in Paris.
6) Existing shareholders will have preferential subscription rights and be able to buy one new SocGen share for each four shares held.
7) They can also trade their preferential rights during the subscription period for a starting price of euro5.90 (US$8.58). New shareholders must purchase four rights to buy one new share, bringing the theoretical cost of SocGen shares after the capital increase to euro71 (US$103.25).
8) "The idea is that existing shareholders follow us," Chief Financial Officer Frederic Oudea said in a conference call. "We want this to be the biggest success possible."
9) Shares on Monday closed down 4.02 percent at euro74.59 (US$108.47), giving the bank a market value of euro34.8 billion (US$50.32 billion). In the past 12 months the bank has lost nearly half of its value.
10) The capital increase will allow the group's tier 1 ratio, a measure of financial strength, to be restored to 8 percent, the bank said. It will also use the cash to maintain lending in France and to fund growth in countries including Russia, Brazil, India and central and eastern Europe.
11) The subscription period will run from Feb. 21 to Feb. 29 and is being managed by JPMorgan Chase, Morgan Stanley and Societe Generale's own corporate and investment banking division, the bank said.
12) The bank said it intends to "draw lessons from recent events and strengthen our control procedures and anti-fraud measures" in the first half of the year in its corporate and investment banking division.
13) A report by the French Finance Ministry faulted the bank's controls for not halting the unauthorized activity by trader Kerviel.
14) Jean-Pierre Mustier, head of the company's corporate and investment banking arm, said in a conference call a number of measures have been taken to strengthen security including monitoring nominal, and not just net, exposure of traders and the introduction of biometric requirements in place of passwords. Kerviel is accused of using other employees' passwords to circumvent the bank's controls.
15) Kerviel was sent to La Sante prison, in southern Paris, on Friday pending further investigation into his case.
16) A report on the Web site of French newsmagazine Nouvel Observateur over the weekend detailed communication between Kerviel and brokerage employee Moussa Bakir, conducted via internal messaging on a Reuters financial information terminal.
17) Bakir worked at Newedge, a 50-50 joint venture between Societe Generale and Calyon bank, through which Kerviel passed some of his trades, judicial officials have said. Judicial officials would not confirm the authenticity of the extracts.
18) A lawyer for the bank, Jean Veil, said investigators are speaking with several Societe Generale employees but insisted, "It is much too early to have a definite clear opinion on the assistance Mr. Kerviel may have received from anybody."
19) Since Kerviel's actions came to light, analyst Pierron said major banks worldwide have been reviewing their security and control systems "because they know very well at a given moment they also could have a weakness."
20) Societe Generale bank has become the subject of takeover rumors since the affair, with cross-town rival BNP Paribas mulling a bid. Both Mustier and Oudea declined to comment on potential bids.
21) Chief Executive Daniel Bouton, whose resignation has so far been refused by the board, will keep his job at least until after the capital increase and possibly beyond, Pierron said.
22) Bouton provides a "certain stability" to the bank, and there are few candidates of his caliber, he said.
23) Societe Generale also announced write-downs Monday of euro2.6 billion (US$3.8 billion) related to the fallout from the U.S. mortgage crisis -- bigger than the euro2.05 billion (US$2.98 billion) announced in January. The bank said the January figure relates only to the fourth quarter and did not include residential mortgage-backed securities.
24) In a prospectus for investors, Societe Generale also said net profit for 2007 was euro947 million (US$1.37 billion), more than the euro600 million (US$871 million) to euro800 million (US$1.16 billion) announced in January.
25) Societe Generale also announced a number of new targets following an efficiency study launched last year which it said will lift gross operating profit by euro1 billion a year by 2010.
2008-02-14
Lawyer seeks questioning of French trader ' s bosses in Societe Generale probe
(APW_ENG_20080214.1560)
1) A lawyer for shareholders of French bank Societe Generale asked judges Thursday to question a senior supervisor of a trader the bank blames for major losses and to revoke the company's status as "victim" in the probe.
2) Frederik Canoy, representing a shareholder association called APPAC, said senior officials at the bank must have been aware of trader Jerome Kerviel's unauthorized activity.
3) "Societe Generale, in presenting itself as a victim, is an impostor," Canoy said by telephone. "The real victims are the shareholders."
4) Two investigating judges are questioning people as they look into the affair, while Kerviel is in prison pinned with preliminary charges.
5) APPAC, which says shareholders suffered as a result of the trading losses, and Societe Generale, which says the bank suffered as a result of the losses, are both considered complainants in the case.
6) Canoy said he sent a letter Thursday to judges asking that Societe Generale's status be changed. It was unclear when the judges would consider his request.
7) The bank says Kerviel evaded computer controls and overstepped his authority to bet massively in futures in European equity indices, and that it lost nearly euro5 billion (more than US$7 billion) cleaning up his trades. The bank says he acted alone, but Kerviel said during questioning that his superiors looked the other way when he was making money for the bank.
8) In the lawyer's letter, Canoy asked the judges to question Martial Rouyere, the head of the trading desk where Kerviel worked. Canoy, who has access to legal documents filed in the case, suggested Rouyere had knowledge of Kerviel's activity but did not stop it because in 2007 Kerviel's trades were gaining money for the bank.
9) Officials at Societe Generale would not comment on Canoy's claim, or say whether Rouyere is still employed with the company.
10) Rouyere's name repeatedly came up in computer text messages Kerviel sent to a broker who has been questioned in the case, according to excerpts of the messages published in Nouvel Obs weekly over the weekend.
11) Kerviel was questioned for a third time Wednesday, for five hours.
2008-02-15
Societe Generale trader acted alone under watch of superiors, lawyer says
(APW_ENG_20080215.0918)
1) Jerome Kerviel worked alone on the trades that French bank Societe Generale says led to billions of euros (dollars) of losses -- although his bosses must have known what he was doing, one of his lawyers said in an interview Friday.
2) Guillaume Selnet is seeking to get Kerviel out of jail, where he was sent by a French court a week ago on concerns that if left free he could have contacted possible accomplices.
3) "Jerome, since the start, has stated that he was acting alone," Selnet told The Associated Press at his office in Paris.
4) "The more relevant question is whether or not the whole staff of SocGen, who condoned everything that Jerome was doing over two and a half years, can or not be called accomplices."
5) "The facts speak for themselves. Jerome Kerviel was a junior trader on his team. For two and a half years he traded and invested up to twice the bank's value on the markets. Could he have done that without ever anyone in SocGen noticing?"
6) Societe Generale declined to comment via spokesperson Laura Schalk.
7) Kerviel was ordered held in Paris' La Sante prison last Friday pending further investigation into his case. His lawyers have lodged an appeal for his release.
8) Selnet said information may have been manipulated to ensure Kerviel's detention, citing "rumors" that were "leaked on purpose" to media about his state-of-mind and monthly phone bills exceeding euro1,000 (US$1,460).
9) Selnet said that being kept behind bars "reinforces this false idea that he is the Houdini of finance."
10) On Jan. 24, Societe Generale stunned the banking world with its announcement that it had uncovered Kerviel's unauthorized trades a few days earlier and that unwinding them had cost nearly euro5 billion (more than US$7 billion).
11) Kerviel, 31, was a junior trader on the Delta One desk charged with "plain vanilla" trading -- or the more basic forms of futures trading. He took home a relatively modest salary for the finance world of euro47,500 (US$69,470) last year -- excluding the results-related bonus, his lawyer said.
12) Yet he had been betting on futures markets with euro50 billion (US$73.13 billion) -- more than Societe Generale's market value.
13) The bank said he hid his positions and avoided controls thanks to his computer skills and experience from previous jobs in the bank's back offices that keep records of and process transactions.
14) Selnet disputed SocGen's version, saying Kerviel's superiors must have known and looked the other way while he was making money for the bank. His trades were in the black last year, but plunged in January before they were discovered.
15) "Although he was the youngest trader, he was by far the most profitable of the team. He was only entitled because of his age to a nominal bonus. What we can say so far is that apparently the rest of the team, including the senior members, was served bonuses based on Jerome's trades."
16) Judges probing the case questioned Kerviel for a third time Wednesday, for five hours. Selnet denied suggestions that he considered suicide.
17) "It's very tough for him but since the start Jerome has been very courageous," he said.
2008-02-19
Investigators looking for third trader in Societe Generale affair
(APW_ENG_20080219.0659)
1) French investigators are trying to learn the identity -- and confirm the existence -- of a third person mentioned in the case of a trader blamed by French bank Societe Generale SA for almost euro5 billion (more than $7 billion) in losses.
2) Communication between Jerome Kerviel and broker Moussa Bakir includes multiple references to a mysterious third trader -- known simply as Mat -- whom investigators have so far been unable to locate, Isabelle Montagne, a spokeswoman for the Paris prosecutors' office, said Tuesday.
3) Kerviel has said he was working alone but that 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. Investigators are searching for others who could have known about, or participated in, what the bank says was Kerviel's unauthorized activity.
4) They have questioned Bakir, an employee of Newedge, a 50-50 joint venture between Societe Generale and Calyon bank, through which Kerviel passed some of his trades.
5) According to Kerviel's exchanges with Bakir via internal messaging on a financial information terminal, Kerviel said he was in contact with Mat, a London-based broker, who covered some of his positions, Montagne said.
6) Le Parisien newspaper reported Tuesday that initial findings suggest Mat never existed, and that Kerviel invented him to justify some of his operations.
7) "We haven't found him for the moment," Montagne said. "It's too soon to say he's a imaginary accomplice because investigations are not finished."
8) Christophe Reille, a spokesman for Kerviel, did not return a message on his cell phone.
9) Kerviel was sent to jail by a French court earlier this month on concerns that if left free he could have contacted possible accomplices. His lawyers have lodged an appeal for his release.
10) He is being held on preliminary charges of breach of trust, forgery and unauthorized computer activity. If tried and convicted on those charges, he faces up to three years in prison and hefty fines. Such charges mean judges have decided that further investigation is needed.
11) On Jan. 24, Societe Generale reported a trading loss of nearly euro5 billion (more than US$7 billion) trading loss from liquidating euro50 billion (US$73.18 billion) in unauthorized futures positions taken by Kerviel. The bank said Kerviel hid his positions with fake hedges.
12) Societe Generale's Fimat unit -- which merged last month with Credit Agricole's futures unit to form Newedge -- began investigating suspicious trades four months before the announcement about Kerviel's trades, Newedge spokesman Jean-Christophe Huertas said.
13) Fimat managers initiated an "internal study" after noting "an unusual increase in commissions," he said.
14) Huertas said initial findings of the internal probe showed an increase in commissions for cash equities between mid-September and the start of November, not the futures trades that led to Societe Generale's losses.
15) Senior management asked for further investigations, which were delayed by the merger to form Newedge. The findings were passed to Societe Generale in January.
16) Societe Generale declined to comment on an ongoing investigation via spokesperson Joelle Rosello.
17) Bakir has been on sick leave since French judges named him as a material witness in their investigations into Kerviel's trades, said Huertas.
18) Bakir filed a legal complaint Friday with the Paris prosecutor's office saying the exchanges between him and Kerviel were made by excerpts published in the news media to look like he was more involved in the bets that led to Societe Generale's loss than he actually was, Montagne said.
19) Kerviel, 31, was a junior trader charged with "plain vanilla" trading -- or the more basic forms of futures trading. He took home a relatively modest salary for the finance world of euro47,500 ($69,470) last year -- excluding any results-related bonuses.
2008-02-20
Probe at France ' s Societe Generale finds no complicity behind big trading loss
(APW_ENG_20080220.1230)
1) Investigators of alleged fraud at Societe Generale said Wednesday that they have found no proof of misuse of funds or signs that more than one trader was behind a multibillion-euro loss at the French bank.
2) In an interim report, internal investigators at France's second-largest bank said procedures were followed correctly but they failed to stop futures trader Jerome Kerviel, accused of carrying out unauthorized trades that forced the bank to mop up almost euro5 billion (US$7.33 billion) in losses.
Probe at France ' s Societe Generale finds no complicity behind big trading loss
(APW_ENG_20080220.1301)
1) Officials investigating a multi-billion-euro trading scandal at French bank Societe Generale said Wednesday that a preliminary internal probe had found the only trader implicated in the scandal acted alone.
2) An internal investigating committee said it had found no evidence that anyone helped futures trader Jerome Kerviel hide his positions or that he may have made personal monetary gains through the allegedly unauthorized positions.
3) In an interim report, the investigators at France's No. 2 bank said procedures were followed correctly in general, but they failed to stop Kerviel, 31, who is accused of carrying out trades that led to almost euro5 billion (US$7.33 billion) in losses.
4) "At this stage of the investigations, there is no evidence of embezzlement or internal or external complicity," according to a report by a committee charged with investigating the losses. "The investigations are continuing, in particular, to cover a wider area than the activities of the author of the fraud."
5) Societe Generale has said Kerviel began trading illicitly in 2005 for small amounts, building up to bets totaling euro50 billion ($73.28 billion) discovered on Jan. 18, which the bank then liquidated.
6) "The failure to identify the fraud until that date can be attributed firstly to the efficiency and variety of the concealment techniques employed by the fraudster, secondly to the fact that operating staff did not systematically carry out more detailed checks, and finally to the absence of certain controls" that "might have identified the fraud," the report said.
7) Headed by board member Jean-Martin Folz, former CEO of PSA Peugeot Citroen, the committee is being helped by more than 40 bank inspectors and auditing firm PricewaterhouseCoopers to examine the causes and sizes of the trading losses and look into whether the bank accurately communicated information about the scandal.
8) The committee said it is declining to make any conclusions about any responsibility of Kerviel's superiors at this stage. It said it plans to deliver a full report before the bank's shareholders meeting May 27.
9) The case is also being investigated by the French market authority, the French banking commission and a French court.
10) Several weaknesses in Societe Generale's procedures have been identified, and correcting them right requires tightening computer security, reinforcing controls and taking more account of the possibility of fraud, the committee said.
11) Societe Generale will announce its 2007 results Thursday. An early statement to investors asked to fund a euro5.5 billion (nearly US$8 billion) capital increase said net profit fell to euro947 million (US$1.37 billion), from euro5.2 billion (US$7.62 billion) in 2006.
2008-02-21
Societe Generale posts fourth-quarter loss after trading fraud
(APW_ENG_20080221.0455)
1) Troubled French bank Societe Generale SA said Thursday that a trading scandal and writedowns linked to the crisis in financial markets led to a net loss in the fourth quarter last year.
2) France's second-largest bank said it made a net loss of euro3.35 billion (US$4.91 billion) compared with a euro1.18 billion (US$1.73 billion) net profit in the same period of 2006.
3) The French bank took a euro4.9 billion (US$7.18 billion) hit closing the unauthorized positions of futures trader Jerome Kerviel. Though it discovered the positions on Jan. 18, the losses that resulted were booked in the fourth quarter.
4) Societe Generale is seeking euro5.5 billion (nearly US$8 billion) in new capital to shore up its finances after the trading loss and euro2.6 billion (US$3.8 billion) in previously announced writedowns linked to the U.S. mortgage crisis.
5) The Paris-based bank had already announced preliminary results Feb. 11 in a prospectus for investors taking part in a capital increase, the subscription period for which runs from Thursday until Feb. 29.
6) For the full year, SocGen confirmed that despite its recent troubles, it made a net profit of euro947 million (US$1.4 billion), after euro5.2 billion (US$7.62 billion) in 2006.
7) The trading scandal is "an isolated event," said Axel Pierron, an analyst with research house Celent in Paris. "Without this event, the results of Societe Generale were not at all bad."
8) The bank warned of the possibility of "further write-downs" in the first quarter at its asset management division as the liquidity crisis in financial markets continues.
9) Banks globally have written off more than US$150 billion (euro100 billion) in the past half-year, including large fourth-quarter write-offs by European competitors such as UBS AG and Credit Suisse.
10) Societe Generale's subprime-related writedowns are bigger than the euro589 million (US$868.3 million) announced Wednesday by cross-town rival BNP Paribas SA but are dwarfed in comparison with the 15.6 billion francs (US$13.7 billion; euro9 billion) announced by UBS.
11) As banks globally assess the fall-out from the subprime crisis, Societe Generale is also faced with questions about its controls systems after Kerviel was able to hide positions worth around euro50 billion (US$73.28 billion).
12) An internal report on Wednesday said bank officials failed to follow up on warnings and carry out more detailed checks, leaving concealment tricks allegedly used by Kerviel uncovered.
13) Societe Generale has tightened controls in the wake of the trading scandal, the report said.
14) Without the trading losses, Societe Generale said it would have gained euro4.17 billion (US$6.11 billion) over the full year.
15) Full-year revenue fell 2.2 percent to euro21.92 billion (US$32.13 billion) from euro22.42 billion (US$32.86 billion) in 2006. Fourth-quarter revenue dropped 32 percent to euro3.88 billion (US$5.69 billion) from euro5.67 billion (US$8.31 billion) a year-earlier.
16) SocGen said it is proposing a 2007 dividend of 90 euro cents (US$1.32) a share compared with euro5.20 the year before.
Probe at Societe Generale finds no complicity behind big trading loss
(APW_ENG_20080221.0557)
1) Officials investigating a multi-billion-euro trading scandal at French bank Societe Generale said that a preliminary internal probe found that the only trader implicated in the scandal acted alone.
2) An internal investigating committee said Wednesday night that it found no evidence that anyone helped futures trader Jerome Kerviel hide his positions or that he may have made personal monetary gains through the allegedly unauthorized positions.
3) Societe Generale has said Kerviel began trading illicitly in 2005 for modest amounts, which became more substantial from March 2007 and built up to bets totaling euro50 billion (US$73.28 billion) discovered on Jan. 18, which the bank then liquidated.
4) The bank revealed almost euro5 billion (US$7.33 billion) in losses from closing the positions on Jan. 24, saying Kerviel forged documents and emails to suggest he'd hedged his positions.
5) Critics of the bank's version of the events say Kerviel couldn't have amassed such large positions without attracting the attention of his colleagues.
6) In an interim report, the investigators at France's No. 2 bank said control procedures failed to stop Kerviel, 31, because the bank didn't follow up on warnings.
7) "At this stage of the investigations, there is no evidence of embezzlement or internal or external complicity," according to a report by a committee charged with investigating the losses.
8) The bank failed to identify the fraud due "to the efficiency and variety of the concealment techniques employed by the fraudster, secondly to the fact that operating staff did not systematically carry out more detailed checks, and finally to the absence of certain controls (that) might have identified the fraud."
9) Investigations are continuing and will be enlarged to cover the activities of other traders, the report said.
10) Headed by board member Jean-Martin Folz, former CEO of PSA Peugeot Citroen, the committee of three independent directors is being helped by more than 40 bank inspectors and auditing firm PricewaterhouseCoopers to examine the causes and sizes of the trading losses and look into whether the bank accurately communicated information about the scandal.
11) The committee said it is declining to make any conclusions about any responsibility of Kerviel's superiors at this stage. It said it plans to deliver a full report before the bank's shareholders meeting May 27.
12) The case is also being investigated by the France's market authority, its banking commission and a French court.
13) Several weaknesses in Societe Generale's procedures have been identified, and correcting them right requires tightening computer security, reinforcing controls and taking more account of the possibility of fraud, the committee said.
Societe Generale posts fourth-quarter loss after trading fraud
(APW_ENG_20080221.0632)
1) Troubled French bank Societe Generale SA said Thursday that a trading scandal and writedowns linked to the crisis in financial markets led to a net loss in the fourth quarter last year.
2) France's second-largest bank said it lost euro3.35 billion (US$4.91 billion) compared with a euro1.18 billion (US$1.73 billion) net profit in the same period of 2006.
3) The French bank took a euro4.9 billion (US$7.18 billion) hit closing the unauthorized positions of futures trader Jerome Kerviel. Though it discovered the positions on Jan. 18, the losses that resulted were booked in the fourth quarter.
4) Shares rose 0.3 percent to euro66.81 ($97.92) in Paris morning trading. The stock has lost roughly half of its value this year.
5) Societe Generale is seeking euro5.5 billion (nearly US$8 billion) in new capital to shore up its finances after the trading loss and euro2.6 billion (US$3.8 billion) in previously announced writedowns linked to the U.S. mortgage crisis.
6) The Paris-based bank had already announced preliminary results Feb. 11 in a prospectus for investors taking part in a capital increase, the subscription period for which starts Thursday and runs until Feb. 29.
7) CEO Daniel Bouton said in a conference call Thursday that initial contacts with investors went "very well."
8) Analysts say Societe Generale needs the new funds to ward off unwanted predators. France's largest bank BNP Paribas SA, which has said it is mulling a bid, declined to comment on its intentions Wednesday.
9) "Societe Generale needs to succeed at this capital increase which is needed to preserve a certain independence," said Axel Pierron, an analyst with research house Celent in Paris.
10) For the full year, SocGen confirmed that despite its recent troubles it made a net profit of euro947 million (US$1.4 billion), after euro5.2 billion (US$7.62 billion) in 2006.
11) The trading scandal is "an isolated event," said Pierron. "Without this event, the results of Societe Generale were not at all bad."
12) Without the trading losses, Societe Generale said it would have gained euro4.17 billion (US$6.11 billion) over the full year.
13) The trading scandal has raised questions about the bank's control procedures.
14) An internal report on Wednesday said bank officials failed to follow up on warnings and carry out more detailed checks, leaving concealment tricks allegedly used by Kerviel uncovered.
15) The report commissioned by a committee of three independent board members detailed 75 warnings signs in Kerviel's exchanges, such as a trade with a maturity date on a Saturday or a missing broker name.
16) Analyzing what went wrong, the report said "no initiative was taken to check the truth of affirmations" provided by Kerviel, "even when they lacked probability."
17) The signals weren't always flagged to superiors and "when the hierarchy was warned, they didn't react," the report said.
18) Kerviel claims his superiors must have known what he was doing but that they looked the other way when he was making money.
19) Societe Generale has tightened controls in the wake of the trading scandal, the report said.
20) Bouton vowed "total transparency" in the case in order to maintain the bank's reputation.
21) His offer to resign over the affair has been twice rejected by the bank's board despite calls from French President Nicolas Sarkozy for top executives to face the "consequences" of the huge losses.
22) Bouton said he is holding up "very well" under the pressure.
23) Full-year revenue fell 2.2 percent to euro21.92 billion (US$32.13 billion) from euro22.42 billion (US$32.86 billion) in 2006. Fourth-quarter revenue dropped 32 percent to euro3.88 billion (US$5.69 billion) from euro5.67 billion (US$8.31 billion) a year-earlier.
24) The bank warned of the possibility of "further write-downs" in the first quarter at its asset management division as the liquidity crisis in financial markets continues.
25) Banks globally have written off more than US$150 billion (euro100 billion) in the past half-year, including large fourth-quarter write-offs by European competitors such as UBS AG and Credit Suisse.
26) Societe Generale's subprime-related writedowns are bigger than the euro589 million (US$868.3 million) announced Wednesday by cross-town rival BNP Paribas SA but are dwarfed in comparison with the 15.6 billion francs (US$13.7 billion; euro9 billion) announced by UBS.
27) SocGen said it is proposing a 2007 dividend of 90 euro cents (US$1.32) a share compared with euro5.20 the year before.
Societe Generale posts fourth-quarter loss after trading fraud
(APW_ENG_20080221.1319)
1) Troubled French bank Societe Generale SA said Thursday that a trading scandal and write-downs linked to the crisis in financial markets led to a net loss in the fourth quarter last year.
2) France's second-largest bank said it lost euro3.35 billion (US$4.91 billion) compared with a euro1.18 billion (US$1.73 billion) net profit in the same period of 2006.
3) The French bank took a euro4.9 billion (US$7.18 billion) hit closing the unauthorized positions of futures trader Jerome Kerviel, who is currently being held in a Paris prison and questioned for a third time Thursday by investigators. Though it discovered the positions on Jan. 18, the losses that resulted were booked in the fourth quarter.
4) Shares rose 0.3 percent to euro66.81 ($97.92) in Paris morning trading. The stock has lost roughly half of its value this year.
5) Societe Generale is seeking euro5.5 billion (nearly US$8 billion) in new capital to shore up its finances after the trading loss and euro2.6 billion (US$3.8 billion) in previously announced write-downs linked to the U.S. mortgage crisis.
6) The Paris-based bank had already announced preliminary results Feb. 11 in a prospectus for investors taking part in a capital increase, the subscription period for which starts Thursday and runs until Feb. 29.
7) CEO Daniel Bouton said in a conference call Thursday that initial contacts with investors went "very well."
8) Analysts say Societe Generale needs the new funds to ward off unwanted predators. France's largest bank BNP Paribas SA, which has said it is mulling a bid, declined to comment on its intentions Wednesday.
9) "Societe Generale needs to succeed at this capital increase which is needed to preserve a certain independence," said Axel Pierron, an analyst with research house Celent in Paris.
10) For the full year, SocGen confirmed that despite its recent troubles it made a net profit of euro947 million (US$1.4 billion), after euro5.2 billion (US$7.62 billion) in 2006.
11) The trading scandal is "an isolated event," said Pierron. "Without this event, the results of Societe Generale were not at all bad."
12) Without the trading losses, Societe Generale said it would have gained euro4.17 billion (US$6.11 billion) over the full year.
13) The trading scandal has raised questions about the bank's control procedures.
14) An internal report on Wednesday said bank officials failed to follow up on warnings and carry out more detailed checks, leaving concealment tricks allegedly used by Kerviel uncovered.
15) The report commissioned by a committee of three independent board members detailed 75 warnings signs in Kerviel's exchanges, such as a trade with a maturity date on a Saturday or a missing broker name.
16) Analyzing what went wrong, the report said "no initiative was taken to check the truth of affirmations" provided by Kerviel, "even when they lacked probability."
17) The signals weren't always flagged to superiors and "when the hierarchy was warned, they didn't react," the report said.
18) Kerviel claims his superiors must have known what he was doing but that they looked the other way when he was making money. He is being held on preliminary charges of breach of trust, forgery and unauthorized computer activity.
19) Societe Generale has tightened controls in the wake of the trading scandal, the report said.
20) Bouton vowed "total transparency" in the case in order to maintain the bank's reputation.
21) His offer to resign over the affair has been twice rejected by the bank's board despite calls from French President Nicolas Sarkozy for top executives to face the "consequences" of the huge losses.
22) Bouton said he is holding up "very well" under the pressure.
23) Full-year revenue fell 2.2 percent to euro21.92 billion (US$32.13 billion) from euro22.42 billion (US$32.86 billion) in 2006. Fourth-quarter revenue dropped 32 percent to euro3.88 billion (US$5.69 billion) from euro5.67 billion (US$8.31 billion) a year-earlier.
24) The bank warned of the possibility of "further write-downs" in the first quarter at its asset management division as the liquidity crisis in financial markets continues.
25) Banks globally have written off more than US$150 billion (euro100 billion) in the past half-year, including large fourth-quarter write-offs by European competitors such as UBS AG and Credit Suisse.
26) Societe Generale's subprime-related write-downs are bigger than the euro589 million (US$868.3 million) announced Wednesday by cross-town rival BNP Paribas SA but are dwarfed in comparison with the 15.6 billion francs (US$13.7 billion; euro9 billion) announced by UBS.
27) SocGen said it is proposing a 2007 dividend of 90 euro cents (US$1.32) a share compared with euro5.20 the year before.
2008-03-04
Societe Generale trader ' s lawyers request his release from Paris jail
(APW_ENG_20080304.1042)
1) Lawyers for Societe Generale trader Jerome Kerviel are seeking his release from jail while investigations continue into a massive trading scandal, the Paris prosecutor's office said Tuesday.
2) The request will be examined March 14.
3) Societe Generale stunned the banking world on Jan. 24, saying it had run up euro5 billion (over US$7 billion) in losses closing Kerviel's unauthorized positions. The bank says Kerviel forged documents and e-mails to suggest he had hedged his positions.
4) Investigating judges have filed preliminary charges against Kerviel for forgery, breach of trust and unauthorized computer activity.
5) Kerviel was sent to Paris' La Sante prison Feb. 8 pending further investigation into his case. 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.
6) Kerviel says he acted alone, a claim backed up by a preliminary internal probe by Societe Generale.
2008-03-11
Societe Generale says euro5.5 billion capital increase successful
(APW_ENG_20080311.0848)
1) Societe Generale SA, seeking to restore its status as a top-tier bank after a massive trading scandal, said Tuesday it succesfully raised euro5.5 billion (US$8.44 billion) in new capital through a share offering.
2) The bank attained its target sum, and had even more interest than expected, a sign of investor confidence in the scandal-plagued bank that could help it resist predators.
3) The share issue was oversubscribed by 184 percent, with total subscription orders of euro10.2 billion (US$15.65 billion), the bank said in a statement.
4) The funds help plug a gap in SocGen's finances after it lost nearly euro5 billion (more than US$7 billion) unwinding what the bank says were unauthorized bets by trader Jerome Kerviel -- and after euro2.6 billion ($3.8 billion) in write-downs linked to the U.S. subprime mortgage crisis.
5) The high interest in the share offer, especially in a volatile banking market, "is a real success and a vote of confidence from shareholders for Societe Generale, its strategy, its management," said Guillaume Gabaix of Morgan Stanley, which helped manage the sale.
6) The bank plans to use the new capital to boost its financial standing and fund future growth in Russia, Brazil and India and in central and eastern Europe.
7) "The success seen in this operation will allow Societe Generale to pursue its development" in sectors and regions with growth potential, the bank said in a statement.
8) SocGen said its tier 1 ratio, a measure of financial strength, was restored to 8 percent.
9) Most of the new shares were bought by new or former shareholders.
10) Existing shareholders had preferential subscription rights, offered new shares for euro47.50 (US$68.94), and were able to buy one new SocGen share for each four shares held.
11) New shareholders had to purchase four rights to buy one new share, bringing the theoretical cost of SocGen shares after the capital increase to euro71 (US$108.91).
12) The bank's shares have plunged in recent months. They were trading up 1.7 percent at euro65.20 ($100) in late morning trading in Paris.
13) Societe Generale bank has become the subject of takeover rumors since the trading affair was revealed in January, with cross-town rival BNP Paribas mulling a bid.
14) Societe Generale's trading and subprime losses led it to a loss in the fourth quarter of 2007. Its overall 2007 profit was just euro947 million (US$1452.7 million) compared to euro5.2 billion in 2006.
15) Meanwhile, French investigations are continuing into the trading losses.
16) A French court will rule Friday whether trader Kerviel can be freed from Paris' La Sante prison during the probe. Investigating judges have filed preliminary charges against Kerviel for forgery, breach of trust and unauthorized computer activity.
17) Societe Generale says Kerviel forged documents and e-mails to suggest he had hedged his positions. Kerviel says he acted alone, a claim backed up by a preliminary internal probe by Societe Generale.
18) The bank's CEO, Daniel Bouton, is to testify before the French parliament's finance committee on Wednesday about troubles in the banking sector and demands for tighter regulations.
Societe Generale says euro5.5 billion capital increase successful
(APW_ENG_20080311.1690)
1) Societe Generale SA, seeking to restore its status as a top-tier bank after a massive trading scandal, said Tuesday it succesfully raised euro5.5 billion (US$8.44 billion) in new capital through a share offering.
2) The bank attained its target sum, and had even more interest than expected, a sign of investor confidence in the scandal-plagued bank that could help it resist predators.
3) The share issue was oversubscribed by 184 percent, with total subscription orders of euro10.2 billion (US$15.65 billion), the bank said in a statement.
4) The funds help plug a gap in SocGen's finances after it lost nearly euro5 billion (more than US$7 billion) unwinding what the bank says were unauthorized bets by trader Jerome Kerviel -- and after euro2.6 billion ($3.8 billion) in write-downs linked to the U.S. subprime mortgage crisis.
5) The high interest in the share offer, especially in a volatile banking market, "is a real success and a vote of confidence from shareholders for Societe Generale, its strategy, its management," said Guillaume Gabaix of Morgan Stanley, which helped manage the sale.
6) The bank plans to use the new capital to boost its financial standing and fund future growth in Russia, Brazil and India and in central and eastern Europe.
7) "The success seen in this operation will allow Societe Generale to pursue its development" in sectors and regions with growth potential, the bank said in a statement.
8) SocGen said its tier 1 ratio, a measure of financial strength, was restored to 8 percent.
9) Existing shareholders had preferential subscription rights, offered new shares for euro47.50 (US$68.94), and were able to buy one new SocGen share for each four shares held.
10) New shareholders had to purchase four rights to buy one new share, bringing the theoretical cost of SocGen shares after the capital increase to euro71 (US$108.91).
11) The bank's shares have plunged in recent months. They were trading up 1.7 percent at euro65.20 ($100) in late morning trading in Paris.
12) Societe Generale bank has become the subject of takeover rumors since the trading affair was revealed in January, with cross-town rival BNP Paribas mulling a bid.
13) Societe Generale's trading and subprime losses led it to a loss in the fourth quarter of 2007. Its overall 2007 profit was just euro947 million (US$1452.7 million) compared to euro5.2 billion in 2006.
14) Meanwhile, French investigations are continuing into the trading losses.
15) A French court will rule Friday whether trader Kerviel can be freed from Paris' La Sante prison during the probe. Investigating judges have filed preliminary charges against Kerviel for forgery, breach of trust and unauthorized computer activity.
16) Societe Generale says Kerviel forged documents and e-mails to suggest he had hedged his positions. Kerviel says he acted alone, a claim backed up by a preliminary internal probe by Societe Generale.
2008-03-12
French judicial officials say new Societe Generale trader in custody in trading probe
(APW_ENG_20080312.0990)
1) French judicial officials say a new trader at French bank Societe Generale has been taken in for questioning in connection with a multibillion dollar trading scandal.
2) The bank confirmed that investigators searched its offices on Wednesday, taking some records and detaining the employee, whose name they declined to provide. The bank called the search part of "normal proceedings" in the probe.
3) The French bank announced in January a lone trader, Jerome Kerviel, made unauthorized trades that cost it nearly euro5 billion (US$7 billion). He is being held in a Paris prison while the investigation continues.
French judicial officials say new Societe Generale trader in custody in trading probe
(APW_ENG_20080312.1078)
1) French judicial officials said Wednesday that another trader at French bank Societe Generale has been taken in for questioning in connection with a multibillion euro (dollar) trading scandal.
2) Investigators are trying to determine whether Jerome Kerviel -- the trader blamed by the bank for unauthorized trades that cost it nearly euro5 billion (US$7 billion) -- had accomplices, judicial officials said. They were speaking on condition of anonymity because the investigation is ongoing.
3) Societe Generale spokeswoman Laura Schalk confirmed that investigators searched its offices on Wednesday, taking some records and detaining the employee, whose name they declined to provide. She called the search part of "normal proceedings" in the probe.
4) Investigating magistrates questioned Moussa Bakir, an employee of Newedge, a joint venture between Societe Generale and Calyon bank, on several occasions last month.
5) Kerviel was taken into custody following the bank's January disclosure of its massive losses. Investigating judges have filed preliminary charges against him for forgery, breach of trust and unauthorized computer activity.
6) He is being held at a Paris prison pending the investigation, but a French court is to rule Friday on whether he can be freed during the probe.
7) Societe Generale says Kerviel forged documents and e-mails to suggest he had hedged his positions. Kerviel says he acted alone, a claim backed up by a preliminary internal probe by Societe Generale.
French judicial officials say new Societe Generale trader in custody in trading probe
(APW_ENG_20080312.1327)
1) Judicial officials said Wednesday that another trader at French bank Societe Generale has been taken in for questioning in connection with a multibillion dollar trading scandal.
2) Investigators are trying to determine whether Jerome Kerviel -- the trader blamed by the bank for unauthorized trades that cost it nearly euro5 billion (US$7 billion) -- had accomplices, judicial officials said. They were speaking on condition of anonymity because the investigation is ongoing.
3) Societe Generale spokeswoman Laura Schalk confirmed that investigators searched its offices on Wednesday, taking some records and detaining the employee, whose name she declined to provide. She called the search part of "normal proceedings" in the probe.
4) Christophe Reille, a spokesman for Kerviel, declined to comment.
5) A French court is scheduled to rule Friday on whether Kerviel should be freed from a Paris prison during the investigation. Investigators have said they want to prevent Kerviel from speaking with accomplices, if they exist.
6) Kerviel says he acted alone but that 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. Investigators are searching for others who could have known about, or participated in, what the bank says was Kerviel's unauthorized activity.
7) A preliminary internal probe by Societe Generale found no evidence that anyone helped Kerviel hide his positions.
8) The report said bank officials failed to follow up on 74 warnings about questionable trades, uncovering Kerviel's positions only on the 75th.
9) Kerviel's lawyer Guillaume Selnet told The Associated Press last week he will be asking why the alerts "didn't provoke any reaction."
10) Investigating magistrates questioned last month an employee of Newedge, a joint venture between Societe Generale and Calyon bank through which Kerviel passed some of his trades. Moussa Bakir was released without charge after two days of questioning about the case.
11) Kerviel was taken into custody following the bank's January disclosure of its massive losses. He faces preliminary charges of forgery, breach of trust and unauthorized computer activity.
12) If tried and convicted on those charges, he faces up to three years in prison and hefty fines. Such charges mean judges have decided that further investigation is needed.
13) On Jan. 24, Societe Generale reported a trading loss of nearly euro4.9 billion (US$7.58 billion) trading loss from liquidating euro50 billion (US$73 billion) in unauthorized futures positions taken by Kerviel.
14) Societe Generale says Kerviel forged documents and e-mails to suggest he had hedged his positions.
15) On Tuesday the bank successfully raised euro5.5 billion (US$8.4 billion) in new capital through a share offering designed to restore its status. Many analysts have said the success of the capital increase was essential for the bank's continuing independence.
16) SocGen shares rose around 6 percent Wednesday following an unsourced report in La Tribune business daily that rival BNP Paribas, which has said it is mulling a bid, could give details before the annual Societe Generale shareholder meeting May 27. The paper didn't say where it got the information and BNP Paribas called the report part of the "rumor mill."
Investigators take another Societe Generale trader into custody in trading probe
(APW_ENG_20080312.1827)
1) Investigators searched Societe Generale offices, confiscating records and taking another trader into custody Wednesday as they try to determine whether the scandal that cost the venerable French bank billions of euros (dollars) was caused by more than one person.
2) Societe Generale spokeswoman Laura Schalk confirmed that investigators detained an employee whose name she declined to provide. She called the search part of "normal proceedings of the police investigation."
3) One trader, Jerome Kerviel, has already been jailed after the bank blamed him for unauthorized trades that cost SocGen nearly euro5 billion (more than $7 billion). Kerviel is hoping to get out of jail this week, and his lawyers insist there is no reason to keep him behind bars after a Societe Generale report on the losses backed up his claim that he acted alone.
4) Judicial officials said Wednesday they are still trying to determine whether Kerviel had accomplices. They were speaking on condition of anonymity because the investigation is ongoing.
5) A French court is scheduled to rule Friday on whether Kerviel should be freed from Paris' La Sante prison, where he has been held since Feb. 8. Investigators have said they want to prevent Kerviel from speaking with accomplices, if they exist.
6) The detention of the new broker "is an attempt to influence the judges," Guillaume Selnet, one of Kerviel's lawyers, told The Associated Press in an interview from his office in Paris.
7) Selnet noted that soon before the initial hearing a month ago on whether to detain Kerviel, a broker who had handled Kerviel's trades was taken into custody.
8) Investigating magistrates questioned the broker, Moussa Bakir, an employee of Newedge, a joint venture between Societe Generale and Calyon bank through which Kerviel passed some of his trades. Bakir was released without charge after two days of questioning about the case.
9) Gilbert Fouche, an independent Paris lawyer, said the court will probably rule to keep Kerviel behind bars as long as questions remain about possible accomplices.
10) Kerviel says he acted alone but that 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. Investigators are searching for others who could have known about, or participated in, what the bank says was Kerviel's unauthorized activity.
11) A preliminary internal probe by Societe Generale found no evidence that anyone helped Kerviel hide his positions.
12) The report said bank officials failed to follow up on 74 warnings about questionable trades, uncovering Kerviel's unauthorized positions only on the 75th.
13) Kerviel faces preliminary charges of forgery, breach of trust and unauthorized computer activity. If tried and convicted on those charges, he faces up to three years in prison and hefty fines.
14) On Jan. 24, Societe Generale reported a trading loss of euro4.9 billion ($7.58 billion) from liquidating euro50 billion (US$73.18 billion) in unauthorized futures positions taken by Kerviel.
15) Societe Generale says Kerviel forged documents and e-mails to suggest he had hedged his positions.
16) On Tuesday the bank successfully raised euro5.5 billion (US$8.44 billion) in new capital through a share offering designed to restore its status as a top-tier bank after the scandal. Many analysts have said the success of the capital increase was essential for the bank's continuing independence.
17) SocGen shares rose 6.2 percent Wednesday to close at euro71.11 ($110.06) following an unsourced report in La Tribune business daily that rival BNP Paribas, which has said it is mulling a bid, could give details before the annual SocGen shareholder meeting May 27. BNP Paribas called the report part of the "rumor mill."
2008-03-13
French judicial officials say new Societe Generale trader in custody in trading probe
(APW_ENG_20080313.0050)
1) Judicial officials say that another trader at French bank Societe Generale has been taken in for questioning in connection with a multibillion dollar trading scandal.
2) Investigators are trying to determine whether Jerome Kerviel -- the trader blamed by the bank for unauthorized trades that cost it nearly euro5 billion (US$7 billion) -- had accomplices, judicial officials said Wednesday. They were speaking on condition of anonymity because the investigation is ongoing.
3) Societe Generale spokeswoman Laura Schalk confirmed that investigators searched its offices Wednesday, taking some records and detaining the employee, whose name she declined to provide. She called the search part of "normal proceedings" in the probe.
4) Christophe Reille, a spokesman for Kerviel, declined to comment.
5) A French court is scheduled to rule Friday on whether Kerviel should be freed from a Paris prison during the investigation. Investigators have said they want to prevent Kerviel from speaking with accomplices, if they exist.
6) Kerviel says he acted alone but that 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. Investigators are searching for others who could have known about, or participated in, what the bank says was Kerviel's unauthorized activity.
7) A preliminary internal probe by Societe Generale found no evidence that anyone helped Kerviel hide his positions.
8) The report said bank officials failed to follow up on 74 warnings about questionable trades, uncovering Kerviel's positions only on the 75th.
9) Kerviel's lawyer Guillaume Selnet told The Associated Press last week he will be asking why the alerts "didn't provoke any reaction."
10) Investigating magistrates questioned last month an employee of Newedge, a joint venture between Societe Generale and Calyon bank through which Kerviel passed some of his trades. Moussa Bakir was released without charge after two days of questioning about the case.
11) Kerviel was taken into custody following the bank's January disclosure of its massive losses. He faces preliminary charges of forgery, breach of trust and unauthorized computer activity.
12) If tried and convicted on those charges, he faces up to three years in prison and hefty fines. Such charges mean judges have decided that further investigation is needed.
13) On Jan. 24, Societe Generale reported a trading loss of nearly euro4.9 billion (US$7.58 billion) trading loss from liquidating euro50 billion (US$73 billion) in unauthorized futures positions taken by Kerviel.
14) Societe Generale says Kerviel forged documents and e-mails to suggest he had hedged his positions.
15) On Tuesday the bank successfully raised euro5.5 billion (US$8.4 billion) in new capital through a share offering designed to restore its status. Many analysts have said the success of the capital increase was essential for the bank's continuing independence.
16) SocGen shares rose around 6 percent Wednesday following an unsourced report in La Tribune business daily that rival BNP Paribas, which has said it is mulling a bid, could give details before the annual Societe Generale shareholder meeting May 27. The paper didn't say where it got the information and BNP Paribas called the report part of the "rumor mill."
Societe Generale employee who worked with suspected trader freed after questioning
(APW_ENG_20080313.0708)
1) A Societe Generale employee held for questioning in a probe into massive losses previously blamed on a lone trader has been released without charge.
2) Judicial officials said the employee of the French bank was freed Thursday. The employee was detained when investigators searched the bank's office's Wednesday.
3) Investigators are trying to determine whether trader Jerome Kerviel had any accomplices when he made unauthorized trades that led to billions of euros in losses.
(APW_ENG_20080313.0711)
1) Ld-Writethru,0132
2) URGENT
3) Societe Generale employee who worked with suspected trader freed after questioning
4) Eds: APNewsNow. UPDATES with trader released.
5) By INGRID ROUSSEAU
6) Associated Press Writer
7) PARIS (AP) -- A Societe Generale employee held for questioning in a probe into massive losses previously blamed on a lone trader has been released without charge.
8) Judicial officials said the employee of the French bank was freed Thursday. The employee was detained when investigators searched the bank's office's Wednesday.
9) Investigators are trying to determine whether trader Jerome Kerviel had any accomplices when he made unauthorized trades that led to billions of euros in losses.
Societe Generale employee who worked with suspected trader freed after questioning
(APW_ENG_20080313.0833)
1) A Societe Generale employee who worked with Jerome Kerviel, the trader blamed for massive losses at the French bank, was released Thursday without charge after questioning, judicial officials said.
2) Investigators are trying to determine whether Kerviel -- accused of unauthorized trades that cost the bank nearly euro5 billion (more than $7 billion) -- had accomplices.
3) Investigators searched the bank's offices Wednesday, taking records and detaining an employee of the cash equities desk of SG Securities, a branch of Societe Generale where Kerviel, a futures trader, had worked, bank officials said.
4) The employee was put in police custody and questioned, and released Thursday, judicial officials said. They were speaking on condition of anonymity because the investigation is ongoing.
5) A French court is scheduled to rule Friday on whether Kerviel should be freed from a Paris prison during the investigation. Investigators have said they want to prevent Kerviel from speaking with accomplices, if they exist.
6) State prosecutors said Thursday they oppose a request by Kerveil's lawyers to grant him provisional release during the investigation.
7) Kerviel says he acted alone but that 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. Investigators are searching for others who could have known about, or participated in, what the bank says was Kerviel's unauthorized activity.
8) A preliminary internal probe by Societe Generale found no evidence that anyone helped Kerviel hide his positions. The report said bank officials failed to follow up on 74 warnings about questionable trades, uncovering Kerviel's positions only on the 75th.
9) Last month, investigating magistrates questioned an employee of Newedge, a joint venture between Societe Generale and Calyon bank through which Kerviel passed some of his trades. Moussa Bakir was released without charge after two days of questioning about the case.
10) On Jan. 24, Societe Generale reported a trading loss of nearly euro4.9 billion (US$7.58 billion) trading loss from liquidating euro50 billion (US$73 billion) in unauthorized futures positions taken by Kerviel. Societe Generale says Kerviel forged documents and e-mails to suggest he had hedged his positions.
11) Kerviel was taken into custody in February, and faces preliminary charges of forgery, breach of trust and unauthorized computer activity.
12) The bank's shares were trading down 4 percent Thursday at euro68.21 ($105.57).
(APW_ENG_20080313.0834)
1) Ld-Writethru,0468
2) Societe Generale employee who worked with suspected trader freed after questioning
3) Eds: UPDATES in graf 6 with prosecutors opposing provisional release; RECASTS lede.
4) By INGRID ROUSSEAU
5) Associated Press Writer
6) PARIS (AP) -- A Societe Generale employee who worked with Jerome Kerviel, the trader blamed for massive losses at the French bank, was released Thursday without charge after questioning, judicial officials said.
7) Investigators are trying to determine whether Kerviel -- accused of unauthorized trades that cost the bank nearly euro5 billion (more than $7 billion) -- had accomplices.
8) Investigators searched the bank's offices Wednesday, taking records and detaining an employee of the cash equities desk of SG Securities, a branch of Societe Generale where Kerviel, a futures trader, had worked, bank officials said.
9) The employee was put in police custody and questioned, and released Thursday, judicial officials said. They were speaking on condition of anonymity because the investigation is ongoing.
10) A French court is scheduled to rule Friday on whether Kerviel should be freed from a Paris prison during the investigation. Investigators have said they want to prevent Kerviel from speaking with accomplices, if they exist.
11) State prosecutors said Thursday they oppose a request by Kerveil's lawyers to grant him provisional release during the investigation.
12) Kerviel says he acted alone but that 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. Investigators are searching for others who could have known about, or participated in, what the bank says was Kerviel's unauthorized activity.
13) A preliminary internal probe by Societe Generale found no evidence that anyone helped Kerviel hide his positions. The report said bank officials failed to follow up on 74 warnings about questionable trades, uncovering Kerviel's positions only on the 75th.
14) Last month, investigating magistrates questioned an employee of Newedge, a joint venture between Societe Generale and Calyon bank through which Kerviel passed some of his trades. Moussa Bakir was released without charge after two days of questioning about the case.
15) On Jan. 24, Societe Generale reported a trading loss of nearly euro4.9 billion (US$7.58 billion) trading loss from liquidating euro50 billion (US$73 billion) in unauthorized futures positions taken by Kerviel. Societe Generale says Kerviel forged documents and e-mails to suggest he had hedged his positions.
16) Kerviel was taken into custody in February, and faces preliminary charges of forgery, breach of trust and unauthorized computer activity.
17) The bank's shares were trading down 4 percent Thursday at euro68.21 ($105.57).
Societe Generale trader questioned alongside bosses in trading probe
(APW_ENG_20080313.1408)
1) French judges are questioning Societe Generale trader Jerome Kerviel alongside his former bosses about massive trading losses the bank blames on him.
2) Judicial officials say the questioning was taking place in the offices of investigating judges who are probing the case. The judges are trying to determine whether Kerviel acted alone in making unauthorized trades that the bank says cost it billions of euros.
Societe Generale trader questioned alongside bosses in trading probe
(APW_ENG_20080313.1478)
1) French judges were questioning Societe Generale trader Jerome Kerviel on Thursday alongside his former bosses about massive trading losses the bank blames on him, judicial officials said.
2) Two investigating judges are trying to determine what, if anything, Kerviel's colleagues and superiors knew about his unauthorized trades, which the bank says cost it nearly euro5 billion (more than $7 billion).
3) Kerviel says he acted alone but that 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.
4) Kerviel was questioned alongside one former boss, Eric Cordelle, last week.
5) Judicial officials said Kerviel was brought Thursday morning to the offices of the investigating judges, where the futures trader was questioned alongside former superiors. Their names were not released. The judicial officials spoke on condition of anonymity because the investigation is ongoing.
6) Societe Generale would not immediately comment on the questioning.
7) It came after another trader who had worked with Kerviel was released without charge Thursday after being held for questioning in the case.
8) The employee of the cash equities desk of SG Securities, the branch of Societe Generale where Kerviel had worked, was detained Wednesday during a search of the bank's offices in La Defense west of Paris.
9) A French court is scheduled to rule Friday on whether Kerviel should be freed from a Paris prison during the investigation. Investigators have said they want to prevent Kerviel from speaking with accomplices, if he had any.
10) State prosecutors said Thursday they oppose a request by Kerveil's lawyers to grant him provisional release during the investigation.
11) A preliminary internal probe by Societe Generale found no evidence that anyone helped Kerviel hide his positions. The report said bank officials failed to follow up on 74 warnings about questionable trades, uncovering Kerviel's positions only on the 75th.
12) On Jan. 24, Societe Generale reported a trading loss of nearly euro4.9 billion (US$7.58 billion) trading loss from liquidating euro50 billion (US$73 billion) in unauthorized futures positions taken by Kerviel. Societe Generale says Kerviel forged documents and e-mails to suggest he had hedged his positions.
13) Kerviel was taken into custody in February, and faces preliminary charges of forgery, breach of trust and unauthorized computer activity.
14) The bank's shares were trading down 4 percent Thursday at euro68.21 ($105.57).
(APW_ENG_20080313.1479)
1) Ld-Writethru,0469
2) Societe Generale trader questioned alongside bosses in trading probe
3) Eds: UPDATES with details of questioning, background; CHANGES byline.
4) By PIERRE-ANTOINE SOUCHARD
5) Associated Press Writer
6) PARIS (AP) -- French judges were questioning Societe Generale trader Jerome Kerviel on Thursday alongside his former bosses about massive trading losses the bank blames on him, judicial officials said.
7) Two investigating judges are trying to determine what, if anything, Kerviel's colleagues and superiors knew about his unauthorized trades, which the bank says cost it nearly euro5 billion (more than $7 billion).
8) Kerviel says he acted alone but that 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.
9) Kerviel was questioned alongside one former boss, Eric Cordelle, last week.
10) Judicial officials said Kerviel was brought Thursday morning to the offices of the investigating judges, where the futures trader was questioned alongside former superiors. Their names were not released. The judicial officials spoke on condition of anonymity because the investigation is ongoing.
11) Societe Generale would not immediately comment on the questioning.
12) It came after another trader who had worked with Kerviel was released without charge Thursday after being held for questioning in the case.
13) The employee of the cash equities desk of SG Securities, the branch of Societe Generale where Kerviel had worked, was detained Wednesday during a search of the bank's offices in La Defense west of Paris.
14) A French court is scheduled to rule Friday on whether Kerviel should be freed from a Paris prison during the investigation. Investigators have said they want to prevent Kerviel from speaking with accomplices, if he had any.
15) State prosecutors said Thursday they oppose a request by Kerveil's lawyers to grant him provisional release during the investigation.
16) A preliminary internal probe by Societe Generale found no evidence that anyone helped Kerviel hide his positions. The report said bank officials failed to follow up on 74 warnings about questionable trades, uncovering Kerviel's positions only on the 75th.
17) On Jan. 24, Societe Generale reported a trading loss of nearly euro4.9 billion (US$7.58 billion) trading loss from liquidating euro50 billion (US$73 billion) in unauthorized futures positions taken by Kerviel. Societe Generale says Kerviel forged documents and e-mails to suggest he had hedged his positions.
18) Kerviel was taken into custody in February, and faces preliminary charges of forgery, breach of trust and unauthorized computer activity.
19) The bank's shares were trading down 4 percent Thursday at euro68.21 ($105.57).
Societe Generale trader questioned alongside bosses in trading probe
(APW_ENG_20080313.1880)
1) French judges questioned Societe Generale trader Jerome Kerviel on Thursday alongside two former bosses about massive trading losses the bank blames on him, judicial officials said.
2) Two investigating judges are trying to determine what, if anything, Kerviel's colleagues and superiors knew about his unauthorized trades, which the bank says cost it nearly euro5 billion (more than $7 billion).
3) Kerviel says he acted alone but that 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.
4) Judicial officials said Kerviel was questioned with two former superiors Thursday in the offices of the investigating judges. Their names were not released. The judicial officials spoke on condition of anonymity because the investigation is ongoing.
5) Kerviel, who is being held in a Paris prison during the investigation, was questioned alongside one former boss, Eric Cordelle, last week.
6) Societe Generale would not comment on Thursday's questioning.
7) It came after another trader who had worked with Kerviel was released without charge Thursday after being held for questioning in the case.
8) The employee of the cash equities desk of SG Securities, the branch of Societe Generale where Kerviel had worked, was detained Wednesday during a search of the bank's offices in La Defense west of Paris.
9) A French court is scheduled to rule Friday on whether Kerviel should be freed from prison during the investigation. Investigators have said they want to prevent Kerviel from speaking with accomplices, if he had any.
10) State prosecutors said Thursday they oppose a request by Kerviel's lawyers to grant him provisional release.
11) A preliminary internal probe by Societe Generale found no evidence that anyone helped Kerviel hide his positions. The report said bank officials failed to follow up on 74 warnings about questionable trades, uncovering Kerviel's positions only on the 75th.
12) On Jan. 24, Societe Generale reported a trading loss of nearly euro4.9 billion (US$7.58 billion) from liquidating euro50 billion (US$73 billion) in unauthorized futures positions taken by Kerviel. Societe Generale says Kerviel forged documents and e-mails to suggest he had hedged his positions.
13) Kerviel was taken into custody in February, and faces preliminary charges of forgery, breach of trust and unauthorized computer activity.
(APW_ENG_20080313.1881)
1) Ld-Writethru,0462
2) Societe Generale trader questioned alongside bosses in trading probe
3) Eds: UPDATES with questioning over, two bosses involved.
4) By PIERRE-ANTOINE SOUCHARD
5) Associated Press Writer
6) PARIS (AP) -- French judges questioned Societe Generale trader Jerome Kerviel on Thursday alongside two former bosses about massive trading losses the bank blames on him, judicial officials said.
7) Two investigating judges are trying to determine what, if anything, Kerviel's colleagues and superiors knew about his unauthorized trades, which the bank says cost it nearly euro5 billion (more than $7 billion).
8) Kerviel says he acted alone but that 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.
9) Judicial officials said Kerviel was questioned with two former superiors Thursday in the offices of the investigating judges. Their names were not released. The judicial officials spoke on condition of anonymity because the investigation is ongoing.
10) Kerviel, who is being held in a Paris prison during the investigation, was questioned alongside one former boss, Eric Cordelle, last week.
11) Societe Generale would not comment on Thursday's questioning.
12) It came after another trader who had worked with Kerviel was released without charge Thursday after being held for questioning in the case.
13) The employee of the cash equities desk of SG Securities, the branch of Societe Generale where Kerviel had worked, was detained Wednesday during a search of the bank's offices in La Defense west of Paris.
14) A French court is scheduled to rule Friday on whether Kerviel should be freed from prison during the investigation. Investigators have said they want to prevent Kerviel from speaking with accomplices, if he had any.
15) State prosecutors said Thursday they oppose a request by Kerviel's lawyers to grant him provisional release.
16) A preliminary internal probe by Societe Generale found no evidence that anyone helped Kerviel hide his positions. The report said bank officials failed to follow up on 74 warnings about questionable trades, uncovering Kerviel's positions only on the 75th.
17) On Jan. 24, Societe Generale reported a trading loss of nearly euro4.9 billion (US$7.58 billion) from liquidating euro50 billion (US$73 billion) in unauthorized futures positions taken by Kerviel. Societe Generale says Kerviel forged documents and e-mails to suggest he had hedged his positions.
18) Kerviel was taken into custody in February, and faces preliminary charges of forgery, breach of trust and unauthorized computer activity.
2008-03-14
Defense team insists ' no reason ' for SocGen trader to remain in prison during probe
(APW_ENG_20080314.0869)
1) The defense team of Societe Generale trader Jerome Kerviel insisted Friday that there was no justification for him to remain behind bars pending an investigation of massive losses at the French bank.
2) A Paris court will rule later Friday on Kerviel's request for provisional release during the probe over what the bank says were unauthorized trades that cost it nearly euro5 billion (more than US$7 billion).
3) Prosecutors oppose granting Kerviel provisional freedom, out of concern that it could affect the probe. Investigators have said they want to prevent Kerviel from speaking with accomplices, if he had any.
4) Kerviel has been suspended pending the results of the investigation.
5) At least two people who worked with Kerviel have been held for questioning in the probe, but were later released.
6) "Let's stop fantasizing, as the ruling approaches ... that he had accomplices," Kerviel spokesman Christophe Reille said by telephone. "Despite all the evidence, prosecutors continue to want to make the public believe that he had accomplices."
7) Reille insisted that Kerviel has cooperated with investigators, he has shown no signs of wanting to flee France and could in no way tamper with any evidence in the bank's computer systems.
8) "There is no valid reason why he should be held in detention," said Reille. Kerviel is being held in Paris' La Sante prison.
9) Kerviel has said he acted alone, but that 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. Investigators want to determine what -- if anything -- Kerviel's colleagues and superiors knew about his trades.
French court delays ruling on Societe Generale trader ' s appeal for provisional release
(APW_ENG_20080314.1389)
1) A French court has delayed a decision until next week on whether Societe Generale trader Jerome Kerviel must remain in prison pending a probe of a massive trading loss at the French bank.
2) The Paris court said it wouldn't decide on the trader's request for provisional release until Tuesday.
3) Prosecutors oppose the request, saying it could affect the probe. Investigators have said they want to prevent Kerviel from speaking with accomplices -- if he had any.
4) The bank blames Kerviel for allegedly unauthorized trades that cost it nearly euro5 billion (more than US$7 billion).
French court delays ruling on Societe Generale trader ' s appeal for provisional release
(APW_ENG_20080314.1654)
1) A French court delayed a decision until next week on whether former Societe Generale trader Jerome Kerviel must remain in jail pending a probe of a massive trading loss at the French bank.
2) The Paris court convened Friday to consider the trader's request for provisional release, but adjourned until Tuesday. No explanation was given, though such delays are not unusual in French judicial proceedings.
3) Prosecutors oppose the request for releasing Kerviel from Paris' La Sante prison, saying it could affect the probe. Investigators have said they want to prevent Kerviel from speaking with accomplices -- if he had any.
4) The bank blames Kerviel for allegedly unauthorized trades that cost it nearly euro5 billion (more than US$7 billion).
5) Societe Generale lawyer Jean Reinhart said staying in prison would "protect" Kerviel from pressure.
6) "All this necessitates a lot of calm and serenity," he said, adding that much more investigation was necessary.
7) Kerviel has been suspended pending the results of the probe. At least two people who worked with Kerviel have been held for questioning, but were later released.
8) "Let's stop fantasizing, as the ruling approaches ... that he had accomplices," Kerviel spokesman Christophe Reille said earlier Friday. "Despite all the evidence, prosecutors continue to want to make the public believe that he had accomplices."
9) Reille insisted that Kerviel has cooperated with investigators, he has shown no signs of wanting to flee France and could in no way tamper with any evidence in the bank's computer systems.
10) "There is no valid reason why he should be held in detention," said Reille.
11) Kerviel has said he acted alone, but that 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. Investigators want to determine whether Kerviel's colleagues and superiors knew about his trades.
French court delays ruling on Societe Generale trader ' s appeal for provisional release
(APW_ENG_20080314.1743)
1) A French court delayed a decision until next week on whether Societe Generale trader Jerome Kerviel must remain in jail pending a probe of a massive trading loss at the French bank.
2) The Paris court convened Friday to consider the trader's request for provisional release, but adjourned until Tuesday. No explanation was given, though such delays are not unusual in French judicial proceedings.
3) Prosecutors oppose the request for releasing Kerviel from Paris' La Sante prison, saying it could affect the probe. Investigators have said they want to prevent Kerviel from speaking with accomplices -- if he had any.
4) The bank blames Kerviel for allegedly unauthorized trades that cost it nearly euro5 billion (more than US$7 billion).
5) Societe Generale lawyer Jean Reinhart argued that staying in prison would actually benefit Kerviel.
6) "All this necessitates a lot of calm and serenity," he said. "At some point, the pressure will be even stronger for him. In a way he is being protected."
7) Reinhart also said Kerviel has shown no signs of regret, saying the trader had not "asked forgiveness from the 130,000 employees of the bank. He is not trying to redeem himself."
8) Kerviel has been suspended from the bank pending the results of the probe. At least two people who worked with Kerviel have been held for questioning but were later released.
9) "Let's stop fantasizing, as the ruling approaches ... that he had accomplices," Kerviel spokesman Christophe Reille said earlier Friday. "Despite all the evidence, prosecutors continue to want to make the public believe that he had accomplices."
10) Reille insisted that Kerviel has cooperated with investigators, he has shown no signs of wanting to flee France and could in no way tamper with any evidence in the bank's computer systems.
11) "There is no valid reason why he should be held in detention," said Reille. If the court ordered Kerviel to remain behind bars, his lawyers will make a new request to free him, Reille said.
12) Kerviel has said he acted alone, but that 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. Investigators want to determine what -- if anything -- Kerviel's colleagues and superiors knew about his trades.
13) Reinhart, the Societe Generale lawyer, said Kerviel has been offered a new job -- by a computer expert who is registered to consult on court cases. The expert, Jean-Raymond Lemaire, reportedly met Kerviel when the trader's legal team hired him.
2008-03-18
Court frees trader at center of Societe Generale scandal
(APW_ENG_20080318.0540)
1) A French court has ordered the release from prison of a Societe Generale trader accused of a massive fraud at the bank.
2) Jerome Kerviel wanted a provisional release from Paris' grim La Sante prison. He has been held there since Feb. 8.
3) Societe Generale blames Kerviel for allegedly unauthorized trades that cost it nearly euro5 billion (more than US$7 billion).
4) Investigators say they wanted to keep Kerviel jailed to prevent him from speaking with accomplices -- if he had any. Kerviel says he acted alone.
Court frees trader at center of Societe Generale scandal
(APW_ENG_20080318.0592)
1) A French court Tuesday ordered the release from prison of a Societe Generale trader accused of causing massive trading losses for Societe Generale, a spokesman for the trader said.
2) Jerome Kerviel was expected to leave Paris' grim La Sante prison later in the day. He has been held there since Feb. 8. Spokesman Christophe Reille did not elaborate on the order to free Kerviel.
3) Investigators say they wanted to keep him jailed 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 by being released from prison.
4) "We were expecting this decision, we were hoping for it," said Kerviel's lawyer Elisabeth Meyer. "The court listened to us."
5) Societe Generale did not protest the ruling. Societe Generale lawyer Jean Veil called it a "very balanced decision" that will allow a "calm and secure" investigation. He noted the decision came with very strict judicial surveillance.
6) Kerviel has to turn in his identity card and his passport and is forbidden 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.
7) He is barred from meeting certain people, judicial officials said, without giving names. He has to report to police once a week.
8) Societe Generale blames Kerviel for allegedly unauthorized trades that cost it nearly euro5 billion (more than US$7 billion).
9) Kerviel faces preliminary charges, filed Jan. 28, of Kerviel was taken into custody in February, and faces preliminary charges of forgery, breach of trust and unauthorized computer activity.
10) 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. Investigators want to determine what Kerviel's colleagues and superiors may or may not have known about his trades.
11) At least two people who worked with Kerviel have been questioned and released.
12) A preliminary internal probe by Societe Generale found no evidence that anyone helped Kerviel hide his positions. The report said bank officials failed to follow up on 74 warnings about questionable trades, uncovering Kerviel's positions only on the 75th.
13) The decision on whether to allow Kerviel to go free had been expected Friday but was postponed, implying the court needed more time.
Court frees trader at center of Societe Generale scandal
(APW_ENG_20080318.0657)
1) A French court Tuesday ordered the release of a Societe Generale trader accused of causing billions of euros (dollars) in losses for the bank through unauthorized trades, a spokesman for the trader said.
2) Jerome Kerviel was expected to leave Paris' grim La Sante prison later in the day. He has been held there since Feb. 8 pending the investigation. Spokesman Christophe Reille did not elaborate on the order to free Kerviel.
3) Prosecutors said they wanted to keep him jailed 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 by being released from prison.
4) "We were expecting this decision, we were hoping for it," said Kerviel's lawyer Elisabeth Meyer. "The court listened to us."
5) Administrative procedures needed to be handled before Kerviel, 31, could leave the prison in southern Paris.
6) 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.
7) Societe Generale did not protest the ruling. Societe Generale lawyer Jean Veil called it a "very balanced decision" that will allow a "calm and secure" investigation. He noted the decision came with strict judicial surveillance.
8) Kerviel has to turn in his identity card and his passport and is forbidden 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.
9) Kerviel is barred from meeting certain people, judicial officials said, without giving names. He has to report to police once a week.
10) Societe Generale says it discovered the unauthorized trades by Kerviel the weekend of Jan. 19-20 and spent three days unwinding them on shaky world markets. It announced Jan. 24 that it had lost nearly euro5 billion (more than US$7 billion) in the process.
11) Shares in Societe Generale have fallen in recent months amid the trading losses and worldwide financial troubles, but the company restored some investor confidence with a euro5.5 billion capital hike that wrapped up earlier this month. Shares were up 2.6 percent Tuesday morning to euro64.62 ($101.90) in Paris trading.
12) Investigating judges filed preliminary charges against Kerviel on Jan. 28 of forgery, breach of trust and unauthorized computer activity.
13) 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. Investigators want to determine what Kerviel's colleagues and superiors may or may not have known about his trades.
14) At least two people who worked with Kerviel have been questioned and released.
15) A preliminary internal probe by Societe Generale found no evidence that anyone helped Kerviel hide his positions, or that the trader profitted from personal monetary gains. The report said bank officials failed to follow up on 74 warnings about questionable trades, uncovering Kerviel's positions only on the 75th.
16) The decision on whether to allow Kerviel to go free had been expected Friday but was postponed, implying the court needed more time.
17) Frederik Canoy, a lawyer for small shareholders of Societe Generale, a third party in the case who also filed a suit, said it is easier for Kerviel to defend himself now that he is being released.
18) "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.
Court orders release of trader at center of Societe Generale scandal
(APW_ENG_20080318.0706)
1) A French court Tuesday ordered the release of a Societe Generale trader accused of causing billions of euros (dollars) in losses for the bank through unauthorized trades, a spokesman for the trader said.
2) Jerome Kerviel was expected to leave Paris' grim La Sante prison later in the day. He has been held there since Feb. 8, while investigators have been looking into one of history's biggest trading scandals, an affair that rocked France's No. 2 bank and rattled an already volatile world banking sector.
3) "He is doing well. He has courageously resisted," said Kerviel's spokesman, Christophe Reille, outside the gate of the walled prison. "He is not depressive, he is not suicidal and he isn't taking medication."
4) Prosecutors had initially suggested that Kerviel may harm himself. They also said they wanted to keep him jailed to prevent him from speaking with accomplices -- if he had any.
5) 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 by being released from prison.
6) "We were expecting this decision, we were hoping for it," said Kerviel's lawyer Elisabeth Meyer. "The court listened to us."
7) Administrative procedures needed to be handled before Kerviel, 31, could leave the prison in southern Paris.
8) 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. However, his spokesman said he would go home.
9) Societe Generale did not protest the ruling. Societe Generale lawyer Jean Veil called it a "very balanced decision" that will allow a "calm and secure" investigation. He noted the decision came with strict judicial surveillance.
10) Kerviel has to turn in his identity card and his passport and is forbidden 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.
11) Kerviel is barred from meeting certain people, judicial officials said, without giving names. He has to report to police once a week.
12) Societe Generale says it discovered the unauthorized trades by Kerviel the weekend of Jan. 19-20 and spent three days unwinding them on shaky world markets. It announced Jan. 24 that it had lost nearly euro5 billion (more than US$7 billion) in the process.
13) Shares in Societe Generale have fallen in recent months amid the trading losses and worldwide financial troubles, but the company restored some investor confidence -- and might have deterred predators -- with a euro5.5 billion capital hike last month. Shares were up 2.6 percent Tuesday morning to euro64.62 ($101.90) in Paris trading.
14) Investigating judges filed preliminary charges against Kerviel on Jan. 28 of forgery, breach of trust and unauthorized computer activity.
15) 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. Investigators want to determine what Kerviel's colleagues and superiors may or may not have known about his trades.
16) At least two people who worked with Kerviel have been questioned and released.
17) A preliminary internal probe by Societe Generale found no evidence that anyone helped Kerviel hide his positions, or that the trader profitted from personal monetary gains. The report said bank officials failed to follow up on 74 warnings about questionable trades, uncovering Kerviel's positions only on the 75th.
18) Frederik Canoy, a lawyer for small shareholders of Societe Generale, a third party in the case who also filed a suit, said it is easier for Kerviel to defend himself now that he is being released.
19) "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.
Trader suspected in Societe Generale bank scandal leaves prison
(APW_ENG_20080318.1196)
1) The trader accused of causing massive losses at French bank Societe Generale has left a Paris prison hours after a court ruled he could go free while the investigation proceeds.
2) Jerome Kerviel is ending nearly six weeks behind the walls of La Sante prison. The court has forbidden Kerviel from leaving the Paris region among other restrictions.
3) His lawyer, Elisabeth Meyer, says that the 31-year-old trader was not expecting the court to grant him freedom. Kerviel's lawyers had argued that there were no grounds to hold their client since he is cooperating with investigators looking into one of history's biggest trading scandals.
4) Societe Generale lost nearly 5 billion euros (more than 7 billion dollars) after unwinding unauthorized trades they blame on Kerviel.
Trader suspected in Societe Generale bank scandal leaves prison
(APW_ENG_20080318.1272)
1) The trader accused of causing massive losses at French bank Societe Generale left a Paris prison Tuesday as the investigation proceeds into one of history's biggest trading scandals.
2) Jerome Kerviel ended nearly six weeks behind bars at Paris' La Sante prison. Hours earlier, a court had ordered him freed but set out strict conditions, including turning over his passport and staying within the Paris region.
3) Kerviel, wearing a pink shirt under a jacket, smiled and waved to scores of reporters huddled outside the prison. Appearing relaxed, he walked to a small black car with lawyer Elisabeth Meyer without speaking to the reporters.
4) Meyer said earlier that the 31-year-old trader had not been expecting the court to grant him freedom.
5) "He was very happy .... He wasn't expecting that," she said.
6) Prosecutors had said they wanted to keep him jailed to prevent him from speaking with accomplices -- if he had any. Kerviel maintains that he acted alone.
7) Kerviel's lawyers had argued that there were no grounds to hold their client since he is cooperating with investigators and had shown no signs of wanting to flee.
8) He had been held in La Sante since Feb. 8, while investigators probe an affair that rocked France's No. 2 bank and rattled an already volatile world banking sector.
9) Societe Generale says it discovered the unauthorized trades by Kerviel the weekend of Jan. 19-20 and spent three days unwinding them on shaky world markets. It announced Jan. 24 that it had lost nearly euro5 billion (more than US$7 billion) in the process.
10) "He is doing well. He has courageously resisted," said Kerviel's spokesman, Christophe Reille, outside the gate of the walled prison. "He is not depressive, he is not suicidal and he isn't taking medication."
11) Prosecutors had initially suggested that Kerviel may harm himself.
12) "We were expecting this decision, we were hoping for it," said Kerviel's lawyer Elisabeth Meyer. "The court listened to us."
13) "He is going to rest, and we are all going to let him rest," Meyer said. She did not say where he would go. However, his spokesman said he would go home.
14) Societe Generale did not protest the ruling. A lawyer for the bank, Jean Veil, called it a "very balanced decision" that will allow a "calm and secure" investigation.
15) Kerviel had to turn in his identity card and his passport and is forbidden 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.
16) Kerviel is also barred from meeting certain people, judicial officials said, without giving names. He has to report to police once a week.
17) Shares in Societe Generale have fallen in recent months amid the trading losses and worldwide financial troubles, but the company restored some investor confidence -- and might have deterred predators -- with a euro5.5 billion capital hike last month. Shares rose 2.6 percent Tuesday morning to euro64.62 ($101.90) in Paris.
18) Investigating judges filed preliminary charges against Kerviel on Jan. 28 of forgery, breach of trust and unauthorized computer activity.
19) 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. Investigators want to determine what Kerviel's colleagues and superiors may or may not have known about his trades.
20) At least two people who worked with Kerviel have been questioned and released.
21) A preliminary internal probe by Societe Generale found no evidence that anyone helped Kerviel hide his positions, or that the trader profitted from personal monetary gains. The report said bank officials failed to follow up on 74 warnings about questionable trades, uncovering Kerviel's positions only on the 75th.
22) Frederik Canoy, a lawyer for small shareholders of Societe Generale, a third party in the case who also filed a suit, said it is easier for Kerviel to defend himself now that he is being released.
23) "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.
2008-04-03
Lawyers for trader allegedly behind huge loss at Societe Generale protest his firing
(APW_ENG_20080403.0387)
1) Lawyers for a former Societe Generale trader blamed for billions of euros (dollars) in losses have sent a letter to the French bank protesting the conditions of his dismissal.
2) Jerome Kerviel was released last month from provisional detention in prison pending the investigation into nearly euro5 billion (US$7.8 billion) in trading losses at the bank.
3) Kerviel's spokesman Christophe Reille says his lawyers are arguing that the bank violated French employment law -- such as by not giving him a face-to-face meeting to explain the firing.
4) Reille says the defense team has not decided whether to launch court proceedings.
5) The Times of London reports Thursday that Kerviel is to sue his former employers. The newspaper cites a source in Paris that it did not identify.
2008-04-04
Lawyer says Societe Generale case could wrap up this summer, trial next year
(APW_ENG_20080404.1034)
1) The French judicial investigation into massive losses blamed on a single trader at bank Societe Generale could finish by this summer and a trial could be held next year, the trader's lawyer said Friday, adding Kerviel planned to file a complaint for unfair dismissal.
2) Trader Jerome Kerviel, recently released from prison while the French judicial probe continues, is "focused on his defense," lawyer Guillaume Selnet told The Associated Press.
3) Kerviel, accused of having caused almost euro5 billion (more than $7 billion) in losses, also plans to sue Societe Generale for unfair dismissal, Selnet said in his Paris office.
4) "SocGen condoned Jerome's trades," Selnet said. "They shouldn't have filed a criminal complaint against him and they shouldn't have dismissed him."
5) He said a complaint would be filed with France's labor court in the coming weeks.
6) Kerviel has kept a low profile since his release last month from provisional detention. He faces preliminary charges of forgery, breach of trust and unauthorized computer activity. If tried and convicted on those charges, he faces up to three years in prison and hefty fines.
7) Selnet said the investigation could wrap up by the summer.
8) "It should be rather fast. We are anticipating an investigation that will last a few more months," he said. "If there is a trial it should begin some time around the beginning of 2009."
9) Societe Generale reported a trading loss of euro4.9 billion or $7.58 billion, on Jan. 24 from liquidating euro50 billion, or $73.18 billion, in what the banks says were unauthorized futures positions taken by Kerviel. The bank says Kerviel forged documents and e-mails to suggest he had hedged his positions.
10) Kerviel says he acted alone but that his bosses must have been aware of his massive risk-taking, and turned a blind eye as long as he was making money for the bank.
11) Selnet said he doesn't expect Kerviel to go back to work for the bank, should he win his case.
2008-04-09
Societe Generale chief says lessons learned from trader fiasco will boost banking security
(APW_ENG_20080409.0565)
1) The head of French bank Societe Generale SA said lessons learned from Jerome Kerviel, who the bank says cost it almost euro5 billion (more than $7 billion) in losses on unauthorized trades, are helping strengthen security in the global banking community.
2) Speaking to members of parliament in his capacity as president of the French Banking Federation, Daniel Bouton said Societe Generale and a number of its competitors are strengthening control systems in the wake of the scandal.
3) "We are an innovator in something which is being studied: changing the architecture of control," Bouton said.
4) "There are a number of banks which are in the process of developing this."
5) Societe Generale has taken several steps to tighten controls following an internal report into what went wrong in the Kerviel case. The report noted 74 red flags raised on Kerviel's trades that failed to sound the alarm -- he was spotted only on the 75th.
6) The bank says Kerviel faked hedging transactions across a range of financial instruments. They weren't spotted because Societe Generale's back office controllers monitored the trading of individual products separately.
7) The bank now has installed new controls that cross-check red flags raised across different products, allowing individual traders' histories to be monitored.
8) "What we lacked was a transversality of control," Bouton said.
9) Societe Generale has also changed its procedures to monitor the gross exposure of traders, besides the net position. Kerviel amassed positions worth around euro50 billion ($78.47 billion), but his net position appeared unremarkable because he balanced his real trades with fictitious transactions.
10) "It is not the business of banks to take large positions," he said.
11) Security has been stepped up in computer systems to prevent a repetition of Kerviel's trick of borrowing colleagues logins and passwords.
12) Kerviel, recently released from jail pending further investigation, claims his superiors must have known what he was doing but that they chose to look the other way when he was making money.
13) He is facing preliminary charges of breach of trust, forgery and unauthorized computer activity.
14) The judicial investigation could end by this summer and a trial could be held next year, the trader's lawyer, Guillaume Selnet said earlier this month.
Societe Generale chief says lessons learned from trader fiasco will boost banking security
(APW_ENG_20080409.0687)
1) The head of Societe Generale SA said lessons learned from Jerome Kerviel, who the French bank says cost it almost euro5 billion (more than $7 billion) in losses on unauthorized trades, are helping strengthen security in the global banking community.
2) Speaking to members of parliament in his capacity as president of the French Banking Federation, Daniel Bouton said Societe Generale and a number of its competitors are strengthening control systems in the wake of the scandal.
3) "Fraud has existed for as long as banks have existed," Bouton said.
4) "We are an innovator in something which is being studied: changing the architecture of control. There are a number of banks which are in the process of developing this."
5) Societe Generale has taken several steps to tighten controls following an internal report into what went wrong in the Kerviel case. The report noted 74 red flags raised on Kerviel's trades that failed to sound the alarm -- he was spotted only on the 75th.
6) The bank says Kerviel faked hedging transactions across a range of financial instruments. They weren't spotted because Societe Generale's back office controllers monitored the trading of individual products separately.
7) The bank now has installed new controls that cross-check red flags raised across different products, allowing individual traders' histories to be monitored.
8) "That's something we lacked and we have now," Bouton said.
9) Societe Generale has also changed its procedures to monitor the gross exposure of traders, besides the net position. Kerviel amassed positions worth around euro50 billion ($78.47 billion), but his net position appeared unremarkable because he balanced his real trades with fictitious transactions.
10) "It is not the business of banks to take large positions," Bouton said.
11) Security has been stepped up in computer systems to prevent a repetition of Kerviel's trick of borrowing colleagues logins and passwords.
12) Kerviel, recently released from jail pending further investigation, claims his superiors must have known what he was doing but that they chose to look the other way when he was making money.
13) He is facing preliminary charges of breach of trust, forgery and unauthorized computer activity.
14) Bouton said Kerviel's trades haven't dented confidence in the bank among "the hundreds of financial operators we work with."
15) "This fraud does not put into question our risk-assessment system because it involved positions that were hidden," he told a finance committee hearing.
16) "We have not lost any clients."
17) The judicial investigation could end by this summer and a trial could be held next year, the trader's lawyer, Guillaume Selnet said earlier this month.
18) Bouton offered his resignation twice over the scandal, but his offer was rejected by the board.
19) Questioned over the financial crisis in general, Bouton said he sees no evidence of a credit crunch in France.
Societe Generale chief says lessons learned from trader fiasco will boost banking security
(APW_ENG_20080409.0936)
1) The head of Societe Generale SA said lessons learned from its trading fiasco are helping strengthen security in the global banking community -- but that doesn't mean banks will be spared from future fraud.
2) "Fraud has existed for as long as banks have existed," Daniel Bouton told a parliament committee. "There will be other cases."
3) Speaking in his capacity as president of the French Banking Federation, Bouton said losses of almost euro5 billion (more than $7 billion) SocGen blames on unauthorized trades by Jerome Kerviel have prompted the French bank and many of its competitors to strengthen control systems.
4) "We are an innovator in something which is being studied: changing the architecture of control. There are a number of banks which are in the process of developing this."
5) Societe Generale has taken several steps to tighten controls following an internal report into what went wrong in the Kerviel case. The report noted 74 red flags raised on Kerviel's trades that failed to sound the alarm -- he was spotted only on the 75th.
6) The bank says Kerviel faked hedging transactions across a range of financial instruments. They weren't spotted because Societe Generale's back office controllers monitored the trading of individual products separately.
7) The bank now has installed new controls that cross-check red flags raised across different products, allowing individual traders' histories to be monitored.
8) "That's something we lacked and we have now," Bouton said.
9) Societe Generale has also changed its procedures to monitor the gross exposure of traders, besides the net position. Kerviel amassed positions worth around euro50 billion ($78.47 billion), but his net position appeared unremarkable because he balanced his real trades with fictitious transactions.
10) "It is not the business of banks to take large positions," Bouton said.
11) Security has been stepped up in computer systems to prevent a repetition of Kerviel's trick of borrowing colleagues logins and passwords.
12) Georges Ugeux, a former vice president at the New York Stock Exchange who now runs consultancy Galileo Global Advisors, said the SocGen debacle has prompted a lot of banks to re-examine their own internal controls -- but that doesn't mean what happened in Paris could happen anywhere.
13) "What's surprising is the amplitude of the position that one junior trader could move by himself: euro50 billion is a lot of money for one single person," he told The Associated Press.
14) "I hope Mr. Bouton is not trying to say that Societe Generale was like everybody and everybody had to tighten their system afterward just to try to minimize the deficiencies of its own system and of its own bank. The deficiencies were clearly serious at Societe Generale," he added.
15) Kerviel, recently released from jail pending further investigation, claims his superiors must have known what he was doing but that they chose to look the other way when he was making money.
16) He is facing preliminary charges of breach of trust, forgery and unauthorized computer activity.
17) Bouton said Kerviel's trades haven't dented confidence in the bank among "the hundreds of financial operators we work with."
18) "This fraud does not put into question our risk-assessment system because it involved positions that were hidden," he told a finance committee hearing.
19) "We have not lost any clients."
20) The judicial investigation could end by this summer and a trial could be held next year, the trader's lawyer, Guillaume Selnet said earlier this month.
21) Bouton offered his resignation twice over the scandal, but his offer was rejected by the board.
22) Questioned over the financial crisis in general, Bouton said he sees no evidence of a credit crunch in France.
23) The International Monetary Fund on Tuesday said the U.S. mortgage and credit crises could cause almost $1 trillion (euro640 billion) in financial losses globally.
2008-04-25
Former Societe Generale trader accused of causing big bank loss gets new job
(APW_ENG_20080425.0421)
1) The former Societe Generale trader accused of causing billions of euros of losses at the French bank has gotten a new job.
2) A spokesman for Jerome Kerviel says Kerviel has been working for a computer consulting firm outside Paris for about a week.
3) Spokesman Christophe Reille said Friday that Kerviel was allowed to get the job because of a judge's change in the terms of his provisional release from prison.
4) Societe Generale stunned the banking world in January by announcing nearly euro5 billion (over US$7 billion) in losses caused by closing Kerviel's unauthorized positions.
5) Kerviel is facing preliminary charges for breach of trust, forgery and unauthorized computer activity.
Former Societe Generale trader accused of causing big bank loss gets new job
(APW_ENG_20080425.0644)
1) His former employer claims Jerome Kerviel caused one of the biggest trading losses in history and he's charged with unauthorized computer use, but that hasn't prevented ex-Societe Generale trader Kerviel from getting a new job -- as a computer consultant.
2) The 32-year-old former trader's spokesman says Kerviel has landed work with a man who hid him from journalists as the nearly euro5 billion trading loss at the French bank emerged in January. He started last week.
3) "Jerome is a young man who wants to work, and doesn't want to remain inactive living on unemployment insurance -- or whatever," said the spokesman, Christophe Reille.
4) Kerviel, who was given provisional release from prison last month, got the job offer while behind bars in early February, said Reille. Kerviel is working for LCA computer consultancy in the Paris suburb of Levallois.
5) The revelation marks how Kerviel's life is at least partly returning to normal while he awaits his fate, now in the hands of investigating judges.
6) Societe Generale stunned the banking world in January by announcing nearly euro5 billion (over US$7 billion) in losses related to closing unauthorized trading positions by Kerviel.
7) Kerviel says his superiors must have known what he was doing but that they chose to look the other way when he was making money for the bank.
8) He is facing preliminary charges for breach of trust, forgery and unauthorized computer activity. Reille said Kerviel was allowed to get the job because of a judge's change in the terms of his provisional release from prison.
9) Societe Generale, one of Europe's largest banks, is trying to rebuild its reputation after the trading fiasco. It completed a successful euro5.5 billion capital hike launched to fill a hole in finances caused by the trading losses -- and to fend off potential bidders. It has also taken steps to tighten controls following an internal report into what went wrong in its trading division.
2008-05-02
Swiss stock exchange fines Societe Generale for trading breach
(APW_ENG_20080502.0433)
1) The Swiss stock exchange said Friday it has fined French bank Societe Generale for violating trading rules two years ago.
2) The Zurich-based exchange -- known as SWX -- said it imposed a 30,000 Swiss francs (US$28,600; euro18,400) fine on Societe Generale for allowing four authorized traders to make transactions under other people's names. A fifth person, who was not authorized to trade on the SWX, also carried out transactions, it said.
3) "This has happened before with other banks," SWX spokesman Werner Vogt said.
4) The French bank hit the headlines earlier this year after it become embroiled in one of the largest securities scandals in history.
5) One of the bank's former employees, Jerome Kerviel, faces charges ranging from forgery to unauthorized computer use linked to a multibillion euro (dollar) trading loss.
6) "This story has nothing to do with Kerviel," Vogt said.
7) He said Societe Generale was warned about the rule breach at the time, but failed to act on the reprimand.
8) "That tends to increase the fine," Vogt said.
9) Societe Generale has also been ordered to pay 10,000 francs (US$9,540; euro6,140) in costs.
10) The maximum fine possible for trading breaches on the SWX is 200,000 francs (US$190,820; euro122,790) or a suspension of the trader's license.
11) Societe Generale spokeswoman Laura Schalk said the bank is cooperating with the SWX exchange and has implemented the measures required of it.
2008-05-22
Troubled French bank Societe Generale to publish reports on alleged fraud Friday
(APW_ENG_20080522.1339)
1) Troubled French bank Societe Generale SA will publish two related reports Friday into what went wrong during a multi-billion-euro trading scandal uncovered in January this year, a bank official said.
2) An internal report by a three-person committee of independent directors headed by former auto executive Jean-Martin Folz and a report by auditing company PriceWaterhouseCoopers will be made public after the Paris stock market closes, Societe Generale spokeswoman Stephanie Carson-Parker said Thursday.
3) A preliminary probe by the committee said the bank failed to follow up on 75 warnings and said that trader Jerome Kerviel acted alone. Investigators promised a full report before the annual shareholder meeting, which takes place May 27.
4) Societe Generale has said Kerviel began trading illicitly in 2005 for modest amounts and later built up to bets totaling some euro50 billion (US$78 billion) discovered on Jan. 18, which the bank then liquidated.
5) On Jan. 24, the bank revealed almost euro5 billion (more than US$7 billion) in losses from closing the positions, saying Kerviel forged documents and e-mails to suggest he had hedged his positions.
6) Critics of the bank's version of the events say Kerviel could not have amassed such large positions without attracting the attention of his superiors.
7) Societe Generale's board chose Folz, Jean Azema, head of insurer Groupama, and Antoine Jeancout-Galignani, a director of real estate company Gecina SA, to examine the causes and sizes of the trading losses and look into whether the bank accurately communicated information about the scandal. PriceWaterhouseCoopers was asked to assist with the probe.
8) The case is also being investigated by the France's market authority, the country's banking commission and a French court.
9) Societe Generale has said it is tightening computer security, reinforcing controls and taking more account of the possibility of fraud since the affair was uncovered.
2008-05-23
Troubled French bank Societe Generale to publish reports on alleged fraud Friday
(APW_ENG_20080523.0008)
1) Troubled French bank Societe Generale SA will publish two related reports Friday into what went wrong during a multi-billion-euro trading scandal uncovered in January this year, a bank official said.
2) An internal report by a three-person committee of independent directors headed by former auto executive Jean-Martin Folz and a report by auditing company PriceWaterhouseCoopers will be made public after the Paris stock market closes, Societe Generale spokeswoman Stephanie Carson-Parker said Thursday.
3) A preliminary probe by the committee said the bank failed to follow up on 75 warnings and said that trader Jerome Kerviel acted alone. Investigators promised a full report before the annual shareholder meeting, which takes place May 27.
4) Societe Generale has said Kerviel began trading illicitly in 2005 for modest amounts and later built up to bets totaling some euro50 billion (US$78 billion) discovered on Jan. 18, which the bank then liquidated.
5) On Jan. 24, the bank revealed almost euro5 billion (more than US$7 billion) in losses from closing the positions, saying Kerviel forged documents and e-mails to suggest he had hedged his positions.
6) Critics of the bank's version of the events say Kerviel could not have amassed such large positions without attracting the attention of his superiors.
7) Societe Generale's board chose Folz, Jean Azema, head of insurer Groupama, and Antoine Jeancout-Galignani, a director of real estate company Gecina SA, to examine the causes and sizes of the trading losses and look into whether the bank accurately communicated information about the scandal. PriceWaterhouseCoopers was asked to assist with the probe.
8) The case is also being investigated by the France's market authority, the country's banking commission and a French court.
9) Societe Generale has said it is tightening computer security, reinforcing controls and taking more account of the possibility of fraud since the affair was uncovered.
Troubled French bank Societe Generale to publish reports on alleged fraud Friday
(APW_ENG_20080523.0426)
1) Troubled French bank Societe Generale SA will publish two related reports Friday into what went wrong during a multi-billion-euro trading scandal uncovered in January.
2) An internal report by a three-person committee of independent directors headed by former auto executive Jean-Martin Folz and a report by auditing company PriceWaterhouseCoopers will be made public after the Paris stock market closes, Societe Generale spokeswoman Stephanie Carson-Parker said.
3) A preliminary probe by the committee said the bank failed to follow up on 75 warnings and said that trader Jerome Kerviel acted alone. Investigators promised a full report before the annual shareholder meeting, which takes place Tuesday.
4) Folz said Friday that the committee's report "is clear and lacks any ambiguity"and that he would make an oral presentation on the report during the meeting.
5) In an e-mailed response to The Associated Press, he declined to comment further before the report is made public.
6) Societe Generale has said Kerviel began trading illicitly in 2005 for modest amounts and later built up to bets totaling some euro50 billion (US$78 billion) discovered on Jan. 18, which the bank then liquidated.
7) On Jan. 24, the bank revealed almost euro5 billion (more than US$7 billion) in losses from closing the positions, saying Kerviel forged documents and e-mails to suggest he had hedged his positions.
8) Critics of the bank's version of the events say Kerviel could not have amassed such large positions without attracting the attention of his superiors.
9) Societe Generale's board chose Folz, Jean Azema, head of insurer Groupama, and Antoine Jeancout-Galignani, a director of real estate company Gecina SA, to examine the causes and sizes of the trading losses and look into whether the bank accurately communicated information about the scandal. PriceWaterhouseCoopers was asked to assist with the probe.
10) The case is also being investigated by France's market authority, the country's banking commission and a French court.
11) Societe Generale has said it is tightening computer security, reinforcing controls and taking more account of the possibility of fraud since the affair was uncovered.
12) Societe Generale's shares, which have suffered significantly since last year amid subprime market-related losses and the trading scandal, were trading up slightly -- less than 1 percent -- Friday morning at euro68.30 (US$107.61).
Societe Generale investigators suspect Kerviel got help in trades behind huge bank loss
(APW_ENG_20080523.1109)
1) Investigators at Societe Generale SA say they suspect former futures trader Jerome Kerviel was helped by an assistant to cover up massive trading positions that led to a multibillion euro (dollar) loss.
2) They say the French bank's management failures and culture of risk-taking were partly to blame for failing to spot the positions, which when they were unwound let to an almost euro5 billion (over US$7 billion) loss.
3) Investigators didn't find any signs of embezzlement by Kerviel but say that he had sought to boost his results -- and thus increase the amount of bonus he could hope for.
4) The findings came in two internal reports that the bank made public Friday -- one led by a committee of independent directors, the other by audit firm PriceWaterhouseCoopers.
Societe Generale investigators suspect Kerviel got help in trades behind huge bank loss
(APW_ENG_20080523.1265)
1) Investigators at Societe Generale SA say they suspect former futures trader Jerome Kerviel was helped by an assistant to cover up massive trading positions that led to a multibillion euro (dollar) loss.
2) In two long-awaited reports released Friday, the investigators said the French bank's management failures and culture of risk-taking were partly to blame for failing to spot the positions, which led to a loss of almost euro5 billion (over US$7 billion) loss once they were unwound.
3) "The trader's hierarchy, constituting the first level of control, proved deficient in the supervision of his activities," said the board of directors in a statement to shareholders accompanying the reports.
4) It also said Kerviel's direct superior "lacked trading experience" showed "an inappropriate degree of tolerance" about Kerviel's trades. The bank did not name the superior, who they said they have been unable to question because he no longer works for the company.
5) The report also criticized the manager of the company's Delta One trading desk, who they said was aware of the lack of experience of Kerviel's manager and of "deficiencies in the monitoring of risks by the desk in general."
6) One report was led by a committee of non-executive board directors headed by former auto executive Jean-Martin Folz, the other by audit firm PriceWaterhouseCoopers.
7) The report from the directors said that they had "discovered indications of internal collusion involving a trading assistant," whom they declined to identify. They said they were unable to speak to the assistant because of an ongoing judicial probe, adding that it will be up to the court to confirm its suspicions.
8) However, they said they had uncovered an e-mail which suggested that the assistant must have known about the fake trades.
9) The assistant's complicity would have helped Kerviel avoid being uncovered, the report said.
10) Previously, Societe Generale had said it believed that Kerviel acted alone.
11) But the internal report found that "neither JK's hierarchical superiors, nor his colleagues, were aware of the fraudulent mechanisms used or the size of his positions."
12) Kerviel says his superiors must have known what he was doing but that they chose to look the other way when he was making money for the bank.
13) Investigators didn't find any signs of embezzlement by Kerviel, but said it appeared that he had sought to boost his results, and thus increase the amount of bonus he could hope for.
14) The report by PriceWaterhouseCoopers cited a culture of risk-taking at the bank as it grew its investment banking business.
15) "The surge in Delta One trading volumes and profits was accompanied by the emergence of unauthorized practices, with limits regularly exceeded and results smoothed or transferred between traders," the report said.
16) "Several key controls that could have identified fraudulent mechanisms were lacking" and "there was a lack of an appropriate awareness of the risk of fraud," it said.
17) SocGen's board said in a statement it approved the conclusions of the PWC report and its recommendations.
18) Societe Generale has said it is tightening computer security, reinforcing controls and taking more account of the possibility of fraud.
Societe Generale investigators suspect Kerviel got help in trades behind huge bank loss
(APW_ENG_20080523.1406)
1) Investigators at Societe Generale SA say they suspect former futures trader Jerome Kerviel was helped by an assistant to cover up massive trading positions that led to a multibillion euro (dollar) loss.
2) In two long-awaited reports released Friday, the investigators said the French bank's management failures and culture of risk-taking were partly to blame for failing to spot the positions, which led to a loss of almost euro5 billion (over US$7 billion) once they were unwound.
3) The reports detail the extent of Kerviel's alleged fraud in a scandal that broke out in January and has sullied the reputation of the glamorous trading desk at the award-winning bank.
4) Investigators say Kerviel's bosses missed more than 1,000 faked trades; a huge jump in his earnings in 2007; questions about his trades from the Eurex exchange; unusually high levels of cash flow, accounting anomalies, and high brokerage expenses; Kerviel's failure to take vacation; and his breach of the desk's market risk limit on one position.
5) "The trader's hierarchy, constituting the first level of control, proved deficient in the supervision of his activities," said the board of directors in a seven-page statement to shareholders accompanying the reports.
6) The reports said Kerviel's direct superior "lacked trading experience" and showed "an inappropriate degree of tolerance" about his trades. The bank did not name the superior, who they said they have been unable to question because he no longer works for the company.
7) The reports also criticized the manager of the company's Delta One trading desk, who they said was aware of the lack of experience of Kerviel's manager, and "deficiencies in the monitoring of risks by the desk in general."
8) One report was led by a committee of three board directors, the other by audit firm PriceWaterhouseCoopers. They were published ahead of next Tuesday's annual shareholder meeting.
9) The 69-report by the directors said that they had "discovered indications of internal collusion involving a trading assistant," whom they declined to identify. They said they were unable to speak to the assistant because of an ongoing judicial probe, adding that it will be up to the court to confirm its suspicions.
10) However, they said they had uncovered an e-mail which suggested that the assistant must have known about the fake trades.
11) The assistant's complicity would have helped Kerviel avoid being uncovered, the directors' report said.
12) Previously, Societe Generale had said it believed that Kerviel acted alone.
13) But while he had help from a junior colleague, the internal report found that "neither JK's hierarchical superiors, nor his colleagues, were aware of the fraudulent mechanisms used or the size of his positions."
14) Kerviel says his superiors must have known what he was doing but that they chose to look the other way when he was making money for the bank.
15) "We notice that while protecting the superiors of Jerome Kerviel, the Societe Generale has found a new scapegoat -- who just happens to be a 23-year-old assistant," said Guillaume Selnet, a lawyer for Kerviel.
16) He noted that the directors' report was prepared by the bank's own services and insisted that SocGen's version of events keeps changing. The bank issued a preliminary investigation into the scandal in February.
17) "My feeling is that -- we are now on the second report -- by the third report it's going to be the fault of the cleaning ladies," he added. "Each time it goes down (the corporate hierarchy), instead of up."
18) SocGen employee Patrice Leclerc, who heads an association of the bank's employee shareholders, said Kerviel's managers need to explain why they missed warning signals that were picked up in Germany -- and why they didn't follow up on questions from Eurex, the German derivatives exchange.
19) "There exists ways of monitoring this type of thing -- why weren't they used?" he said.
20) Investigators didn't find any signs of embezzlement by Kerviel, but said it appeared that he had sought to boost his results, and thus increase the amount of bonus he could hope for. The report established that part of Kerviel's "official" earnings came from his concealed positions.
21) While the directors' report plumbed the details of the alleged fraud, the 36-page report by PriceWaterhouseCoopers focused on the culture of risk-taking at the bank as it grew its investment banking business and on a review of the measures taken by the bank to fix the problems that the scandal exposed.
22) "The surge in Delta One trading volumes and profits was accompanied by the emergence of unauthorized practices, with limits regularly exceeded and results smoothed or transferred between traders," the PWC report said.
23) "Several key controls that could have identified fraudulent mechanisms were lacking" and "there was a lack of an appropriate awareness of the risk of fraud," it said.
24) The report will be "good news for the lawyers" who are preparing a class action in the U.S. as it spreads the blame, according to Stephane Bonifassi, a French lawyer and a member of the FraudNet network, which operates under the International Chamber of Commerce's commercial crime unit.
25) For Kerviel, "the fact that his hierarchy was a bit laid back will help him."
26) SocGen's board said in a statement to shareholders it approved the conclusions of both reports and their recommendations.
27) The board said the investment bank is tightening computer security, reinforcing controls and taking more account of the possibility of fraud.
28) Deeper reforms, such as the creation of a team dedicated to preventing fraud, "significant investments in security for information technology," and a campaign to raise staff awareness have been launched and will be completed by 2010, the board said.
29) The independent directors in charge of the report are former auto executive Jean-Martin Folz, Jean Azema, head of insurer Groupama, and Antoine Jeancout-Galignani, a director of real estate company Gecina SA.
30) The case is also being investigated by France's market authority, the country's banking commission and a French court.
2008-05-27
Societe Generale chief at shareholders meeting defends bank ' s actions in dealing with fraud
(APW_ENG_20080527.1037)
1) Societe Generale SA chiefs faced boos and jeers at a shareholders meeting Tuesday while defending the French bank's response to one of the world's largest trading scandals, which caused a massive loss.
2) Chairman Daniel Bouton insisted the alleged fraud that the bank has blamed on former trader Jerome Kerviel was an "isolated" event -- and does not reflect the heart of the bank's trading activities.
3) "All the investigations have shown that the positions of the trader from which the losses stem were concealed," he told about 1,500 shareholders at the annual meeting near the bank's headquarters in Paris' business district.
4) "Our control systems didn't allow us to detect his techniques of concealment before January," he added, referring to the month when the scandal broke.
5) In two long-awaited reports released last week, investigators said management failures and a culture of risk-taking were partly to blame for the failure to spot Kerviel's positions, which led to a loss of almost euro5 billion (more than US$7 billion) once they were unwound.
6) The reports detailed a scandal that has sullied the reputation of the glamorous trading desk at the award-winning bank. They said Kerviel's bosses missed more than 1,000 faked trades, a huge jump in his earnings in 2007; questions about his trades from the Eurex exchange; unusually high levels of cash flow, accounting anomalies, and high brokerage expenses; Kerviel's failure to take vacation; and his breach of the desk's market risk limit on one position.
7) "Who do you take us for?" asked one angry shareholder, who was not introduced by name. "You were warned several times. You would have been able to stop him if you had wanted to or if you had the right controls."
8) Another shareholder called for Bouton to resign. Yet another said he had read the investigative reports with disbelief, and called them "damning."
9) Seven SocGen employees have left as a result of the affair, Bouton said. Five were fired, and the head of derivatives and the head of trading resigned, he said.
10) Societe Generale shares have lost 10.2 percent since Jan. 23 -- the day before SocGen revealed the alleged fraud.
11) Bouton said the decline was also linked to the crisis in financial markets which has hit financial stocks around the world. The shares fell 0.37 percent to close at euro66.45 ($104.73) in Paris trading on Tuesday.
12) Bouton stepped down as CEO earlier this month, handing over the daily running of the bank to Frederic Oudea. The change at the top came after the successful completion of a euro5.5 billion ($8.73 billion) capital hike.
13) Oudea, the former finance chief, backed Bouton's version of what he called a "totally exceptional" event.
14) Kerviel's lawyer, Guillaume Selnet, said the trader's bosses had known what he was up to, but chose to look the other way while he was making money for the bank.
15) "It's more than negligence," he said in an interview with The Associated Press. "This is a business model that is at stake."
16) Undetected by multilayered security systems at the bank, Kerviel, a 31-year old junior trader, had for over two years been fraudulently using company funds to bet on European stock markets.
17) It took three days for the bank -- France's second-largest -- to unload his positions just as stock exchanges were plunging amid some of the blackest days in the market since the Sept. 11 terrorist attacks.
18) Kerviel was involved in what the bank calls "plain vanilla," or the more basic forms of hedging, with limited authority. He took home a salary and bonus of less than euro100,000, or about $155,700 -- relatively modest in the financial world.
19) The case is also being investigated by France's market authority, the country's banking commission and a French court.
Societe Generale chief at shareholders meeting defends bank ' s actions in dealing with fraud
(APW_ENG_20080527.1191)
1) Societe Generale SA chiefs faced boos and jeers at a shareholders meeting Tuesday while defending the French bank's response to one of the world's largest trading scandals, which caused a massive loss.
2) Chairman Daniel Bouton insisted the alleged fraud that the bank has blamed on former trader Jerome Kerviel was an "isolated" event -- and does not reflect the heart of the bank's trading activities.
3) "All the investigations have shown that the positions of the trader from which the losses stem were concealed," he told more than 1,600 shareholders at the annual meeting near the bank's headquarters in Paris' business district.
4) "Our control systems didn't allow us to detect his techniques of concealment before January," Bouton added, referring to the month when the scandal broke.
5) In two long-awaited reports released last week, investigators said management failures and a culture of risk-taking were partly to blame for the failure to spot Kerviel's positions, which led to a loss of almost euro5 billion (more than US$7 billion) once they were unwound.
6) The reports detailed a scandal that has sullied the reputation of the glamorous trading desk at the award-winning bank. They said Kerviel's bosses missed more than 1,000 faked trades, a huge jump in his earnings in 2007; questions about his trades from the Eurex exchange; unusually high levels of cash flow, accounting anomalies, and high brokerage expenses; Kerviel's failure to take vacation; and his breach of the desk's market risk limit on one position.
7) "Who do you take us for?" asked one angry shareholder, who was not introduced by name. "You were warned several times. You would have been able to stop him if you had wanted to or if you had the right controls."
8) Another shareholder called for Bouton to resign. Yet another said he had read the investigative reports with disbelief, and called them "damning."
9) Despite their criticism, shareholders approved all the measures submitted by the board, including the renewal of two directors' mandates.
10) Societe Generale shares have lost 10.2 percent since Jan. 23 -- the day before SocGen revealed the alleged fraud.
11) Bouton said the decline was also linked to the crisis in financial markets which has hit financial stocks around the world. On Tuesday, the shares fell 0.37 percent to close at euro66.45 ($104.73) in Paris trading.
12) Seven SocGen employees, including Kerviel, have left as a result of the affair, Bouton said. Five were fired, and the head of derivatives and the head of trading resigned.
13) Bouton stepped down as CEO earlier this month, handing over the daily running of the bank to Frederic Oudea. The change at the top came after the successful completion of a euro5.5 billion ($8.73 billion) capital hike.
14) Oudea, the former finance chief, backed Bouton's version of what he called a "totally exceptional" event.
15) Several SocGen employees and shareholders said they don't expect the head of corporate and investment banking, Jean-Pierre Mustier, to remain much longer at the bank.
16) "I think he has to go," said Jean-Marc Croisy, who retired from the investment banking division in 2006. "It was his department. He was responsible."
17) Kerviel's lawyer, Guillaume Selnet, said the trader's bosses had known what he was up to, but chose to look the other way while he was making money for the bank.
18) "It's more than negligence," he said in an interview with The Associated Press. "This is a business model that is at stake."
19) Undetected by multilayered security systems at the bank, Kerviel, a 31-year old junior trader, had for more than two years been fraudulently using company funds to bet on European stock markets.
20) It took three days for the bank -- France's second-largest -- to unload his positions just as stock exchanges were plunging amid some of the blackest days in the market since the Sept. 11 terrorist attacks.
21) Kerviel was involved in what the bank calls "plain vanilla," or the more basic forms of hedging, with limited authority. He took home a salary and bonus of less than euro100,000, or about US$155,700 -- relatively modest in the financial world.
22) The case is also being investigated by France's market authority, the country's banking commission and a French court.
2008-06-10
French judges investigating losses at Societe Generale visit bank ' s trading floor
(APW_ENG_20080610.0593)
1) Two French judges investigating nearly euro5 billion (more than $7 billion) in losses at Societe Generale visited the bank's trading floor Tuesday, studying the scene where Jerome Kerviel is accused of having carried out massive, unauthorized trades.
2) Societe Generale said it had invited judges Renaud van Ruymbeke and Francoise Desset to visit its headquarters in La Defense, on Paris' western edge. The company gave no further information.
3) No lawyers were present for the visit, during which the judges were receiving a demonstration on the bank's computer system to understand how it worked, according to one of Kerviel's lawyers, Guillaume Selnet.
4) He said no bank employees were being questioned.
5) "I understand why the judges are doing this, but it doesn't seem to me like it will change much," Selnet said.
6) Societe Generale has accused Kerviel of betting tens of billions of the bank's money without permission, which led to massive losses announced by France's second-biggest bank in January. The judges filed preliminary charges against Kerviel of forgery, breach of trust and unauthorized computer use.
7) Kerviel is free while the investigation continues and is working in a new job as a computer consultant. His lawyer says his supervisors were aware of his trades and did not stop them while he was making money for the bank.
8) Two reports issued in May showed that Societe Generale managers had ignored repeated warnings about Kerviel's activities, and pointed to a culture of risk-taking at the bank.
2008-06-25
Judges probing huge SocGen loss host showdown between former trader Kerviel, bank executive
(APW_ENG_20080625.1187)
1) French judicial officials say judges probing a massive trading loss at Societe Generale have questioned former trader Jerome Kerviel alongside a top bank executive.
2) The officials say two investigating judges organized the nearly three hour confrontation between Kerviel and SocGen's head of corporate and investment banking, Jean-Pierre Mustier.
3) The officials said the closed-door hearing Wednesday focused on bank officials' questioning of Kerviel on Jan. 18 to 20 about alleged false trading positions he had taken. Those positions led to a loss of almost euro5 billion once the bank unwound them.
4) The bank announced the alleged fraud Jan. 23. Kerviel is facing preliminary charges for forgery, breach of trust and unauthorized computer use.
2008-07-04
French banking watchdog fines Societe Generale for failing to spot unauthorized trades
(APW_ENG_20080704.1019)
1) France's central bank has fined Societe Generale euro4 million (US$6.3 million) for "serious shortcomings" in its internal controls that led to nearly euro5 billion (US$7.8 billion) in trading losses announced earlier this year.
2) The Bank of France's banking commission has also issued a formal warning to SocGen, one of France's biggest banks. The warning says shortcomings in "hierarchical controls" over an extended period in 2007 fueled the problem.
3) Societe Generale officials in Paris declined to comment on the decision. It was announced Friday on the Bank of France Web site.
4) The bank accuses trader Jerome Kerviel of massive unauthorized trades that led to the losses. Kerviel's lawyer says his superiors were aware of his activities.
French banking watchdog fines Societe Generale for failing to spot unauthorized trades
(APW_ENG_20080704.1076)
1) France's central bank announced Friday that it has fined Societe Generale euro4 million (US$6.3 million) for "serious shortcomings" in its internal controls that led to nearly euro5 billion (US$7.8 billion) in trading losses announced earlier this year.
2) The Bank of France's banking commission also issued a formal warning to SocGen, France's second-biggest bank, saying shortcomings in "hierarchical controls" for extended periods in 2007 fueled the problem.
3) Societe Generale officials in Paris declined to comment on the decision, made Thursday but announced Friday on the Bank of France Web site.
4) The commission's ruling noted "significant weaknesses" in Societe Generale's computer security systems and said that traders and those meant to monitor them were not sufficiently independent of each other. It noted, however, the bank's quick efforts to rectify control failures after the losses were discovered.
5) Societe Generale has accused futures trader Jerome Kerviel of betting tens of billions of the bank's money without permission, which led to massive losses announced in January. Investigating judges have filed preliminary charges against Kerviel for forgery, breach of trust and unauthorized computer use.
6) Kerviel is free while the investigation continues and is working in a new job as a computer consultant. His lawyer says his supervisors were aware of his trades and did not stop them while he was making money for the bank.
7) Two reports issued in May showed that Societe Generale managers had ignored repeated warnings about Kerviel's activities, and pointed to a culture of risk-taking at the bank.
2008-07-23
French trader blamed for multi-billion dollar Societe Generale losses changes defense tactic
(APW_ENG_20080723.1373)
1) The futures trader under investigation for allegedly triggering multibillion-dollar losses at Societe Generale met Wednesday with one of his trading floor superiors in an apparent step to examine the bank's hierarchical controls.
2) Kerviel entered the Justice Palace surrounded by a new team of lawyers looking to switch to a more offensive tactic. He made no comment.
3) However, one of the lawyers, Bernard Benaiem, told the daily Le Figaro that they want to prolong the investigation.
4) "What appears interesting in this file is to determine whether Jerome Kerviel did not benefit from complicity via means furnished or instructions furnished by his hierarchy," Benaiem said. "Were that the case, it would very obviously be inevitable that certain people within Jerome Kerviel's hierarchy be charged."
5) Kerviel was going face to face with Christophe Mianne, director of the equity derivatives department.
6) Societe Generale has accused Kerviel of betting tens of billions of the bank's money without permission, which led to massive losses announced in January. Investigating judges have filed preliminary charges against Kerviel for forgery, breach of trust and unauthorized computer use.
7) Kerviel is free while the investigation continues and is working in a new job as a computer consultant. His defense contends that his supervisors were aware of his trades and did not stop them while he was making money for the bank.
8) Two reports issued in May showed that Societe Generale managers had ignored repeated warnings about Kerviel's activities, and pointed to a culture of risk-taking at the bank.
9) Earlier this month, the Bank of France's banking commission also issued a formal warning to SocGen, France's second-biggest bank, saying shortcomings in "hierarchical controls" for extended periods in 2007 fueled the problem.
2008-07-30
New lawyer for ex-SocGen trader outlines strategy
(APW_ENG_20080730.0691)
1) The head of the new legal team representing Jerome Kerviel said Wednesday more questions need to be asked about why Societe Generale liquidated the former trader's bets just as stock markets were plunging worldwide.
2) "Where did the money go? Who profited from it?" Bernard Benaiem told journalists in Paris. Kerviel's next appearance before investigating judges Francoise Desset and Renaud van Ruymbeke will be Monday.
3) Benaiem explained Kerviel's decision to change lawyers earlier this month, saying the 31-year-old "had the feeling that everything had not been said and the Societe Generale affair had not begun."
4) Kerviel's new defense will focus on SocGen's role in events that triggered almost euro5 billion (more than US$7 billion) in losses -- and in particular whether the bank was trying to deflect attention from subprime-related losses by making Kerviel a scapegoat, Benaiem said.
5) SocGen secretly began unwinding some euro50 billion (US$78 billion) of Kerviel's positions on Jan. 21, when U.S. markets were closed because of the Martin Luther King Day holiday, putting massive pressure on futures markets and exacerbating its losses. That week was marked by turmoil in financial markets worldwide.
6) The bank revealed its actions Jan. 24, when it also announced subprime-related writedowns and provisions of euro2.05 billion ($3.22 billion).
7) SocGen's lawyer Jean Veil said it is "absurd" to claim the bank was seeking to hide its subprime exposure and that it was legally obliged to begin unwinding the trades as soon as it was aware of them.
8) SocGen has said Kerviel began trading illicitly in 2005 for modest amounts. He was involved in what is known as "plain vanilla," or the more basic forms of hedging, with limited authority.
9) The bank says in 2007 he went far beyond his role -- taking massive directional positions in various futures contracts, apparently escaping detection by the bank's control systems by forging documents and e-mails to suggest he had hedged his positions.
10) An internal report by the bank in May said Societe Generale managers failed to follow up on 74 different alarms about Kerviel's activities and queries from derivatives exchange Eurex.
11) "It's about knowing whether there was any complacency on the part of the bank, or a culpable ignorance, or a complicity by information or through the provision of means," Benaiem said.
12) Veil said the bank's position is simple: Kerviel lied about his positions.
13) Kerviel's defense has contended from the start that his supervisors were aware of his trades and did not stop them while he was making money for the bank.
14) Kerviel ousted lawyer Elisabeth Meyer in favor of a new team this month. Working with Benaiem are Caroline Wassermann, Eric Dupond-Moretti, and Francis Tissot. The lawyers are not being paid for working on the case, Benaiem said.
15) The new defense could lengthen investigations. Veil said he thinks that Kerviel may be afraid of going before a judge.
16) "It's strange when someone who claims to be innocent wants to make the process last longer," he said.
2008-08-01
Report: SocGen trader ' s supervisors were negligent
(APW_ENG_20080801.0768)
1) A report by French investigators contradicts former futures trader Jerome Kerviel's claim that his superiors at Societe Generale knew he was betting with tens of billions of the bank's money, a judicial official said Friday.
2) Financial investigators concluded that Kerviel took advantage of his managers' negligence to hide his massive trades -- which contradicts the trader's allegations that his higher-ups were aware of what he was doing and did not stop him as long as he made money for the bank, according to an article in Le Figaro newspaper.
3) A judicial official confirmed Le Figaro's account of the financial brigade's report. The official spoke on condition of anonymity because the investigation is ongoing.
4) In one of history's biggest banking scandals, Societe Generale accused Kerviel, 31, of betting tens of billions of euros of the bank's money without permission, which led to almost euro5 billion (more than US$7 billion) in losses once the bank unwound his positions.
5) The affair rattled the already shaky banking sector earlier this year and prompted widespread calls for tighter internal controls at banks.
6) Investigating judges have filed preliminary charges against Kerviel for forgery, breach of trust and unauthorized computer use.
7) The report by financial investigators, which joins various other documents in the probe, concluded, "We can legitimately believe that the size of the financial losses can be explained by the fraudulent maneuvers of a trader who abused his superiors by taking advantage of their failings and the breakdown of internal controls," according to Le Figaro.
8) Societe Generale, or SocGen, declined to comment about the investigators' report, while Kerviel's spokeswoman and legal team did not immediately respond to phone calls seeking comment.
9) The report by financial investigators echoed many of SocGen's own findings.
10) SocGen has said Kerviel began trading illicitly in 2005 for modest amounts. He was involved in what is known as "plain vanilla," or the more basic forms of hedging, with limited authority.
11) The bank says in 2007 he went far beyond his role -- taking massive directional positions in various futures contracts, apparently escaping detection by the bank's control systems by forging documents and e-mails to suggest he had hedged his positions.
12) An internal report by the bank in May said Societe Generale managers failed to follow up on 74 different alarms about Kerviel's activities and queries from derivatives exchange Eurex. The bank says it had no knowledge of Kerviel's actions.
2008-08-04
SocGen trader ' s lawyer slams leaked report
(APW_ENG_20080804.0580)
1) A lawyer for Jerome Kerviel reacted harshly Monday to the leaking of a report that alleges the former futures trader took advantage of negligence by managers at Societe Generale to hide trades worth tens of billions of euros.
2) "We strongly object to this report, which merely repeats the prosecutions' arguments," Eric Dupond-Moretti said as Kerviel went into a hearing with judges investigating one of history's biggest banking scandals.
3) "The publication of this report and the way it was released to the press is shocking," Dupond-Moretti said.
4) A report in French newspaper Le Figaro on Friday said financial investigators concluded that Kerviel took advantage of his managers' negligence to hide his massive trades. That version contradicts the trader's contention that his higher-ups were aware of what he was doing and did not stop him as long as he made money for the bank.
5) Societe Generale accused Kerviel, 31, of betting tens of billions of euros of the bank's money without permission, which led to almost 5 billion euros (more than US$7 billion) in losses once the bank unwound his positions in January.
6) The affair rattled the already shaky banking sector earlier this year and prompted widespread calls for tighter internal controls at banks.
7) Investigating judges have filed preliminary charges against Kerviel for forgery, breach of trust and unauthorized computer use.
8) Kerviel made no comment to reporters before entering the hearing.
9) However, his attorney contended that SocGen, as the bank is known, is manipulating the justice system to find a scapegoat.
10) "This affair can be summarized very simply," Dupond-Moretti said. "As long as Societe Generale makes dough ... everything is fine. From the moment where, between Jan. 18 to 23, Societe Generale thinks it can lose money, Kerviel becomes in the eyes of the world, of Societe Generale, responsible for everything."
11) The report by financial investigators echoed many of SocGen's own findings.
12) SocGen has said Kerviel began trading illicitly in 2005 for modest amounts. He was involved in what is known as "plain vanilla," or the more basic forms of hedging, with limited authority.
13) The bank says in 2007 he went far beyond his role -- taking massive directional positions in various futures contracts, apparently escaping detection by the bank's control systems by forging documents and e-mails to suggest he had hedged his positions.
14) An internal report by the bank in May said Societe Generale managers failed to follow up on 74 different alarms about Kerviel's activities and queries from derivatives exchange Eurex. The bank says it had no knowledge of Kerviel's actions.
Kerviel ' s assistant handed preliminary charges
(APW_ENG_20080804.0731)
1) A French judicial official says Jerome Kerviel's assistant has become the second person handed preliminary charges in the Societe Generale banking scandal.
2) The official says Kerviel's former assistant Thomas Mougard is being probed for "complicity in introducing fraudulent data into a computer system." The filing gives judges time to pursue an investigation that can result in trial or in charges being dropped.
3) The official spoke Monday on condition of anonymity because the case is ongoing.
4) Societe Generale accused Kerviel of betting tens of billions of euros of the bank's money without permission. Investigators have already filed preliminary charges against Kerviel for forgery, breach of trust and unauthorized computer use.
Kerviel ' s assistant handed preliminary charges
(APW_ENG_20080804.0761)
1) Futures trader Jerome Kerviel's 24-year-old assistant has become the second person handed preliminary charges in the multibillion-euro (-dollar) Societe Generale banking scandal, a French judicial official said Monday.
2) Thomas Mougard is being probed on suspicion on "complicity in introducing fraudulent data into a computer system," the official said, speaking on condition of anonymity because the case is ongoing.
3) The filing gives judges time to pursue an investigation that could result in a trial or in charges being dropped. Mougard is free without any restrictions on his movements during the probe, the official said.
4) Societe Generale has accused Kerviel, 31, of betting tens of billions of euros of the bank's money without permission, which led to almost euro5 billion (more than US$7 billion) in losses once the bank unwound his positions in January.
5) The affair rattled the already shaky banking sector earlier this year and prompted widespread calls for tighter internal controls at banks.
6) Kerviel is the only other person being formally investigated in the case. Investigating judges have filed preliminary charges against him for forgery, breach of trust and logging false data.
7) Mougard's lawywer could not immediately be reached. SocGen spokeswoman Helene Mazier declined to discuss the development, and bank lawyer Jean Veil was not immediately available for comment.
8) Investigators at Societe Generale SA said in May that they suspected Kerviel was helped by an assistant. A 69-page report by three board directors said that they had "discovered indications of internal collusion involving a trading assistant," whom they declined to identify.
9) However, they said they had uncovered an e-mail which suggested that the assistant must have known about the fake trades.
10) The assistant's complicity would have helped Kerviel avoid being uncovered, the directors' report said.
11) Previously, Societe Generale had said it believed that Kerviel acted alone.
12) SocGen has said Kerviel began trading illicitly in 2005 for modest amounts. He was involved in what is known as "plain vanilla," or the more basic forms of hedging, with limited authority.
13) The bank says in 2007 he went far beyond his role -- taking massive directional positions in various futures contracts, apparently escaping detection by the bank's control systems by forging documents and e-mails to suggest he had hedged his positions.
14) An internal report by the bank in May said Societe Generale managers failed to follow up on 74 different alarms about Kerviel's activities and queries from derivatives exchange Eurex. The bank says it had no knowledge of Kerviel's actions.
15) Kerviel's lawyers have said his higher-ups were aware of what he was doing and did not stop him as long as he made money for the bank.
Kerviel ' s assistant handed preliminary charges
(APW_ENG_20080804.0839)
1) A 24-year-old former assistant to futures trader Jerome Kerviel has become the second person handed preliminary charges in the multibillion-euro (-dollar) Societe Generale banking scandal, a French judicial official said Monday.
2) Thomas Mougard is being probed on suspicion on that he knowingly helped enter phony data into a computer system on behalf of Kerviel, who was trying to cover up his massive trades, the official said, speaking on condition of anonymity because the case is ongoing.
3) Societe Generale has accused Kerviel, 31, of betting tens of billions of euros of the bank's money without permission, which led to almost euro5 billion (more than US$7 billion) in losses once the bank unwound his positions in January.
4) The affair, one of history's costliest trading scandals, rattled an already shaky banking sector earlier this year and prompted widespread calls for tighter internal controls at banks. Societe Generale has previously said it suspected Kerviel had help from an assistant.
5) Kerviel is the only other person being formally investigated in the case. Investigating judges have filed preliminary charges against him for forgery, breach of trust and logging false data.
6) Preliminary charges give judges time to pursue an investigation that could result in a trial or in charges being dropped.
7) Mougard is free without any restrictions on his movements during the probe, the official said. The preliminary charges against him are for "complicity in introducing fraudulent data into a computer system," the judicial official said.
8) Mougard's lawyer could not immediately be reached. SocGen spokeswoman Helene Mazier declined to discuss the development, and bank lawyer Jean Veil was not immediately available for comment.
9) A lawyer for Kerviel said the charges were "completely inappropriate."
10) "Thomas Mougard is a young man who doesn't belong in this story," lawyer Caroline Wassermann said. "The people really responsible are not Jerome Kerviel's assistants ... but Jerome Kerviel's superiors. It's not in this direction that you should go hunting for the truth."
11) Kerviel's legal team has insisted his higher-ups were aware of what he was doing and did not stop him as long as he made money for the bank -- charges that the bank has always denied.
12) Investigators at Societe Generale SA said in May that they suspected Kerviel had help from an assistant. A 69-page report by three board directors said they had "discovered indications of internal collusion involving a trading assistant," whom they declined to identify.
13) They also said they had uncovered an e-mail which suggested that the assistant must have known about the fake trades.
14) The assistant's complicity would have helped Kerviel avoid being uncovered, the directors' report said. Previously, Societe Generale had said it believed that Kerviel acted alone.
15) Kerviel was released from jail in March after several weeks behind bars, but had to turn over his passport, was barred from leaving the Paris region or entering trading floors or stock exchanges, and was ordered to report once a week to police.
16) SocGen has said Kerviel began trading illicitly in 2005 for modest amounts. He was involved in what is known as "plain vanilla," or the more basic forms of hedging, with limited authority.
17) The bank says in 2007 he went far beyond his role -- taking massive directional positions in various futures contracts, apparently escaping detection by the bank's control systems by forging documents and e-mails to suggest he had hedged his positions.
18) An internal report by the bank has said Societe Generale managers failed to follow up on 74 different alarms about Kerviel's activities and queries from derivatives exchange Eurex. It said the bank had no knowledge of his actions.
19) The trading scandal has led to a tightening of security and a shake-up in management at the bank, which has split the posts of CEO and chairman to improve governance. Chief financial officer Frederic Oudea was promoted to become the new chief executive in May.
20) France's second-largest bank will publish its second-quarter results on Tuesday. The first quarter was marked by managing the fallout from the euro4.9 billion (US$7.18 billion) hit it took closing what it calls Kerviel's unauthorized positions. The loss was announced in January but included in the bank's 2007 results.
21) Kerviel was questioned by investigating judges Monday, as he has been periodically throughout the case. Bernard Benaiem, a lawyer for the former trader, said there was "a very good atmosphere" during discussions with officials.
22) "We have the feeling that we've come a bit closer to the truth," he told reporters afterward.
2008-08-05
Kerviel ' s assistant handed preliminary charges
(APW_ENG_20080805.0019)
1) A 24-year-old former assistant to futures trader Jerome Kerviel has become the second person handed preliminary charges in the multibillion-euro Societe Generale banking scandal, a French judicial official said.
2) Thomas Mougard is being probed on suspicion that he knowingly helped enter phony data into a computer system on behalf of Kerviel, who was trying to cover up his massive trades, the official said Monday on condition of anonymity because the case is ongoing.
3) Societe Generale has accused Kerviel, 31, of betting tens of billions of euros of the bank's money without permission, which led to almost euro5 billion (more than US$7 billion) in losses once the bank unwound his positions in January.
4) The affair, one of history's costliest trading scandals, rattled an already shaky banking sector earlier this year and prompted widespread calls for tighter internal controls at banks. Societe Generale has previously said it suspected Kerviel had help from an assistant.
5) Kerviel is the only other person being formally investigated in the case. Investigating judges have filed preliminary charges against him for forgery, breach of trust and logging false data.
6) Preliminary charges give judges time to pursue an investigation that could result in a trial or in charges being dropped.
7) Mougard is free without any restrictions on his movements during the probe, the official said. The preliminary charges against him are for "complicity in introducing fraudulent data into a computer system," the judicial official said.
8) Mougard's lawyer could not immediately be reached. SocGen spokeswoman Helene Mazier declined to discuss the development, and bank lawyer Jean Veil was not immediately available for comment.
9) A lawyer for Kerviel said the charges were "completely inappropriate."
10) "Thomas Mougard is a young man who doesn't belong in this story," lawyer Caroline Wassermann said. "The people really responsible are not Jerome Kerviel's assistants ... but Jerome Kerviel's superiors. It's not in this direction that you should go hunting for the truth."
11) Kerviel's legal team has insisted his higher-ups were aware of what he was doing and did not stop him as long as he made money for the bank -- charges that the bank has always denied.
12) Investigators at Societe Generale SA said in May that they suspected Kerviel had help from an assistant. A 69-page report by three board directors said they had "discovered indications of internal collusion involving a trading assistant," whom they declined to identify.
13) They also said they had uncovered an e-mail which suggested that the assistant must have known about the fake trades.
14) The assistant's complicity would have helped Kerviel avoid being uncovered, the directors' report said. Previously, Societe Generale had said it believed that Kerviel acted alone.
15) Kerviel was released from jail in March after several weeks behind bars, but had to turn over his passport, was barred from leaving the Paris region or entering trading floors or stock exchanges, and was ordered to report once a week to police.
16) SocGen has said Kerviel began trading illicitly in 2005 for modest amounts. He was involved in what is known as "plain vanilla," or the more basic forms of hedging, with limited authority.
17) The bank says in 2007 he went far beyond his role -- taking massive directional positions in various futures contracts, apparently escaping detection by the bank's control systems by forging documents and e-mails to suggest he had hedged his positions.
18) An internal report by the bank has said Societe Generale managers failed to follow up on 74 different alarms about Kerviel's activities and queries from derivatives exchange Eurex. It said the bank had no knowledge of his actions.
19) The trading scandal has led to a tightening of security and a shake-up in management at the bank, which has split the posts of CEO and chairman to improve governance. Chief financial officer Frederic Oudea was promoted to become the new chief executive in May.
20) France's second-largest bank will publish its second-quarter results on Tuesday. The first quarter was marked by managing the fallout from the euro4.9 billion (US$7.18 billion) hit it took closing what it calls Kerviel's unauthorized positions. The loss was announced in January but included in the bank's 2007 results.
21) Kerviel was questioned by investigating judges Monday, as he has been periodically throughout the case. Bernard Benaiem, a lawyer for the former trader, said there was "a very good atmosphere" during discussions with officials.
22) "We have the feeling that we've come a bit closer to the truth," he told reporters afterward.
2008-09-03
Kerviel ' s lawyer minimizes assistant ' s role
(APW_ENG_20080903.1037)
1) The one-time assistant to former Societe Generale trader Jerome Kerviel shouldn't face charges in the multibillion-euro trading scandal at the French bank, one of Kerviel's lawyers said Wednesday.
2) Investigators questioned both Kerviel, 31, and his 24-year-old former assistant, Thomas Mougard, in a closed-door session Wednesday.
3) Mougard is being probed on suspicion that he knowingly helped enter phony data into a computer system on behalf of Kerviel, who was trying to cover up massive trades, a French judicial official has said.
4) Mougard "did what Jerome Kerviel asked him to do," said Bernard Benaiem, one of Kerviel's lawyers. "He's an assistant. We're not going to blame a secretary for typing what the boss asks her to type; we don't blame an assistant for doing what a trader asks him to do."
5) Societe Generale has accused Kerviel of betting tens of billions of euros of the bank's money without permission, which led to almost euro5 billion (more than US$7 billion) in losses once the bank unwound his positions in January. Kerviel faces preliminary charges for forgery, breach of trust and logging false data, while Mougard faces preliminary charges for complicity in entering phony data.
6) Preliminary charges give judges time to pursue an investigation that could result in a trial or in charges being dropped.
7) Kerviel's legal team has insisted his superiors were aware of what he was doing and did not stop him as long as he made money for the bank -- charges that the bank has always denied.
8) The affair, one of history's costliest trading scandals, rattled an already shaky banking sector earlier this year and prompted widespread calls for tighter internal controls at banks.
2008-09-25
SocGen: ' Well-armed ' to face financial crisis
(APW_ENG_20080925.0392)
1) French bank Societe Generale SA, recovering from a multibillion-dollar trading scandal, argued Thursday that it is still strong enough to survive the current turmoil in financial markets.
2) SocGen announced in January it had taken a euro4.9 billion ($7 billion) hit while closing what it calls unauthorized positions by former trader Jerome Kerviel. The loss was included in the bank's 2007 results.
3) The French bank has also been dealing with the contagion from risky U.S. mortgages that has hit financial markets. In the past weeks meltdown among some of the most storied names on Wall Street has caused the bankruptcy of Lehman Brothers Holdings Inc. and forced the U.S. government to prepare a $700 billion bailout of the industry.
4) "Societe Generale has demonstrated over the last months our capacity to bounce back and move forward in a very harsh environment and we consider this is mainly due to strong assets of the company," Deputy CEO Severin Cabannes told journalists in Villiers Le Mahieu, near Paris.
5) Cabannes didn't refer to Kerviel by name during the opening remarks of daylong series of presentations, saying only that the bank has strengthened its risk management systems "after what we had to manage at the beginning of this year."
6) Kerviel's legal team has insisted his higher-ups were aware of what he was doing and did not stop him as long as he made money for the bank -- charges the bank has always denied.
7) The bank was forced to take a euro5.5 billion (US$8.5 billion) capital increase earlier this year to raise funds to cover the trading losses, which Cabannes says gives SocGen "financial solidity," one of the assets that would help it weather the global crisis.
8) He also cited the "solidarity and loyalty" of SocGen's 151,000 staff, the loyalty of the bank's customer base and a "continuing and very clear strategy."
9) In August, SocGen reported a 63 percent fall in net profit in the second quarter after a loss in its investment banking unit.
2008-10-30
French trader to be held additional day
(APW_ENG_20081030.1249)
1) A trader suspected of losing more than 600 million euros ($751.5 million) in complex derivative trades at French mutual bank Caisse d'Epargne is to be held 24 additional hours, a judicial official said on Thursday.
2) Investigators with a specialized financial brigade are interrogating the man, whose name has not been released, the official said. The trader is expected to be brought before a judge later Thursday or early Friday.
3) The official was speaking on condition of anonymity, in accordance with judicial policy. The trader was initially taken in for questioning on Wednesday morning and ordered to be held for 24 hours.
4) Caisse d'Epargne's top three executives quit after the losses became known on Oct. 17.
5) A Caisse d'Epargne spokesman has said the bank now calculates the loss was larger than the 600 million euros ($751.5 million) it initially announced. The spokesman declined to provide a new estimate, although the prosecutor's office has mentioned the loss would amount to 751 million euros ($940 million).
6) Paris prosecutors are investigating whether there are grounds for a possible legal case of breach of trust.
7) French Finance Minister Christine Lagarde said last week that an initial investigation discovered "serious holes" in the bank's system of controls.
8) Citing a preliminary report by France's banking commission, she said the losses came in complex trades far removed from the bank's core business.
9) The bank's own internal investigation found a large number of breakdowns in internal controls and said alerts had been disregarded, French news magazine Nouvel Observateur reported on its Web site Wednesday, citing a copy of the investigator's report that the magazine said it had obtained.
10) The losses drew comparisons with the much larger trading scandal suffered by another French bank, Societe Generale, earlier this year. Societe Generale took a 4.9 billion euro ($7 billion) hit closing what it says were unauthorized positions by former trader Jerome Kerviel.
2009-01-22
Report: French trader describes losing reality
(APW_ENG_20090122.0552)
1) The French trader at the center of Societe Generale's multi-billion-dollar banking scandal says he lost his sense of reality while gambling with millions as if it was a video game, a newspaper said Thursday in what it called an interview.
2) However, Jerome Kerviel said in a radio interview after the publication in the popular daily Le Parisien that the comments were taken out of context, were made in private and not meant as an interview. It was the first time Kerviel had been quoted in a full-length interview since the trading scandal broke a year ago.
3) Kerviel is to attend on Thursday what is likely to be his last hearing by investigating judges handling his case, at the end of a year of closely watched legal proceedings in one of the banking world's biggest trading scandals.
4) Societe Generale announced multibillion-euro (dollar) losses in January 2008 that it blamed on unauthorized trades by Kerviel. His lawyers have said Kerviel's superiors were aware all along of his activities but turned a blind eye as long as he was making money for the bank -- a position Kerviel reiterated in the Le Parisien comments.
5) Le Parisien quotes Kerviel as saying, "I lost the sense of reality" while on the trading desk at Societe Generale, where he dealt in equity futures.
6) "I was pushing the limits every day. I was taking crazy risks. And I was making astronomical gains that brought me, sometimes, a really great pleasure," he is quoted as saying.
7) "Overall what we do remains very virtual. It's a bit like playing a video game. Losing or winning millions, it only takes a few seconds," Kerviel is quoted as saying.
8) Le Parisien quotes him as describing big wins the day of the terrorist attacks in London in July 2005 because of positions he had taken on insurance companies. "I won euro500,000 in a few instants. It was the jackpot. I was jubilant," he is quoted as saying. Then, "Suddenly I realized that I was busy having fun when people had just been hit by bombs, I ran to the bathroom and vomited."
9) Speaking on RTL radio Thursday morning, Kerviel said he was "shocked and scandalized" by the publication in Le Parisien, "especially on a day as important as today, where I will probably have my last hearing, where my life and my future is at stake."
10) "The statements were taken out of their context," he said. "I never gave an interview in my life."
11) Officials at Le Parisien did not immediately return calls seeking comment.
12) Kerviel, 32, is facing preliminary charges for forgery, breach of trust and unauthorized computer use.
French judges question Societe Generale trader
(APW_ENG_20090122.1136)
1) French judges questioned former Societe Generale trader Jerome Kerviel and his former boss Thursday in possibly his last hearing in the yearlong probe into the world's biggest trading loss.
2) Kerviel also disavowed a newspaper report that claimed he said he "lost his sense of reality" on the bank's trading desk.
3) Kerviel shot to infamy last January after Societe Generale SA accused him of inflicting the French bank with a loss of euro4.9 billion ($6.33 billion).
4) Judges are investigating some euro50 billion ($64.55 billion) of what Societe Generale says were unauthorized trade positions held by Kerviel. The 32-year-old trader is facing preliminary charges for forgery, breach of trust and unauthorized computer use.
5) "My life and my future is at stake," Kerviel told RTL radio Thursday morning, referring to what he and court officials expected to be his last hearing.
6) Kerviel has always insisted his superiors were aware of what he was doing and did not stop him as long as he made money for the bank. In 2007, he earned euro1.4 billion for the bank, but his luck changed dramatically for the worse in 2008.
7) On Thursday, he and his former superior Eric Cordelle faced the investigating judges together and then the judges questioned Kerviel alone.
8) One of Kerviel's lawyers, Eric Dupond-Moretti, said after the closed-door session that Kerviel accepts responsibility for "a certain number of things but the mechanisms of control and assistance didn't function at all in the heart of Societe Generale."
9) Jean Veil, the lawyer for Societe Generale, told The Associated Press in a telephone interview that Kerviel lied to cover his tracks and "when you are not alone, you don't need to lie."
10) Societe Generale spokeswoman Laura Schalk declined to comment on the hearing.
11) Employed at the bank since 2000, Kerviel worked his way up from a desk that monitors traders to a job on the futures desk where he invested the bank's money by hedging on European equity market indices.
12) The French bank says Kerviel acted alone. Skeptics have questioned whether Kerviel could have manipulated such unfathomable sums -- comparable to a small country's annual economy -- without assistance from or the acquiesce of higher-ups.
13) Once the investigation is wrapped up, lawyers for both sides have three months to seek supplementary motions. The trial is not expected to begin before the end of the year.
14) In an interview published Thursday in the popular daily Le Parisien, Kerviel was quoted as saying he lost his "sense of reality" on the bank's trading desk and gambled with millions as if he were playing a video game.
15) The story quoted Kerviel as saying he "was taking crazy risks" and "making astronomical gains that brought me, sometimes, a really great pleasure."
16) "It's a bit like playing a video game. Losing or winning millions, it only takes a few seconds," he was quoted as saying.
17) But Kerviel told RTL radio later he was "shocked and scandalized" by the publication in Le Parisien, "especially on a day as important as today, where I will probably have my last hearing, where my life and my future is at stake."
18) "The statements were taken out of their context," he said. "I never gave an interview in my life."
19) Le Parisien journalist Francois Vignolle did not return messages seeking comment.
French judges question Societe Generale trader
(APW_ENG_20090122.1541)
1) French judges questioned former Societe Generale trader Jerome Kerviel and his former boss Thursday in possibly his last hearing in the yearlong probe into the world's biggest trading loss.
2) Kerviel also disavowed a newspaper report that claimed he said he "lost his sense of reality" on the bank's trading desk.
3) Kerviel shot to infamy last January after Societe Generale SA accused him of inflicting the French bank with a loss of euro4.9 billion.
4) Judges are investigating some euro50 billion of what Societe Generale says were unauthorized trade positions held by Kerviel. The 32-year-old trader is facing preliminary charges for forgery, breach of trust and unauthorized computer use.
5) "My life and my future is at stake," Kerviel told RTL radio Thursday morning, referring to what he and court officials expected to be his last hearing.
6) Kerviel has always insisted his superiors were aware of what he was doing and did not stop him as long as he made money for the bank. In 2007, he earned euro1.4 billion for the bank, but his luck changed dramatically for the worse in 2008.
7) On Thursday, he and his former superior Eric Cordelle faced the investigating judges together and then the judges questioned Kerviel alone.
8) One of Kerviel's lawyers, Eric Dupond-Moretti, said after the closed-door session that Kerviel accepts responsibility for "a certain number of things but the mechanisms of control and assistance didn't function at all in the heart of Societe Generale."
9) Jean Veil, the lawyer for Societe Generale, told The Associated Press in a telephone interview that Kerviel lied to cover his tracks and "when you are not alone, you don't need to lie."
10) Societe Generale spokeswoman Laura Schalk declined to comment on the hearing.
11) Employed at the bank since 2000, Kerviel worked his way up from a desk that monitors traders to a job on the futures desk where he invested the bank's money by hedging on European equity market indices.
12) The French bank says Kerviel acted alone. Skeptics have questioned whether Kerviel could have manipulated such unfathomable sums -- comparable to a small country's annual economy -- without assistance from or the acquiesce of higher-ups.
13) Kerviel's lawyers said they want more time to investigate amid reports the examining magistrates are moving toward wrapping up the case.
14) "Tonight, the investigation is not over," said defense attorney Bernard Benaiem. "There are things to see, things to clarify."
15) In a 15-minute statement opening the hearing, the trader expressed his "dissatisfaction" with the way the probe has proceeded, including with "the general attitude of the investigating chambers which have refused most, if not all, our requests."
16) Once the investigation is wrapped up, lawyers for both sides have three months to seek supplementary motions. The trial is not expected to begin before the end of the year.
17) In an interview published Thursday in the popular daily Le Parisien, Kerviel was quoted as saying he lost his "sense of reality" on the bank's trading desk and gambled with millions as if he were playing a video game.
18) The story quoted Kerviel as saying he "was taking crazy risks" and "making astronomical gains that brought me, sometimes, a really great pleasure."
19) "It's a bit like playing a video game. Losing or winning millions, it only takes a few seconds," he was quoted as saying.
20) But Kerviel told RTL radio later he was "shocked and scandalized" by the publication in Le Parisien, "especially on a day as important as today, where I will probably have my last hearing, where my life and my future is at stake."
21) "The statements were taken out of their context," he said. "I never gave an interview in my life."
22) Le Parisien journalist Francois Vignolle did not return messages seeking comment.
2009-04-23
French ex-trader wants deeper probe into bank loss
(APW_ENG_20090423.1318)
1) A former trader accused of causing huge losses at French bank Societe Generale has asked investigators to reopen a probe into the case to determine how much his bosses knew about his actions, his lawyer said Thursday.
2) Jerome Kerviel maintains that his superiors were aware of his risky transactions but looked the other way while he was earning big money for the bank, intervening only when he started to lose. The bank insists Kerviel was acting alone.
3) Two investigating judges wrapped up a yearlong probe into the case in January.
4) On Thursday, Kerviel's new lawyer, Olivier Metzner, asked the judges to assign a group of financial market experts to determine how much Kerviel's supervisors knew about the staggering euro800 billion in trades he handled over three years.
5) In an 18-page note to the judges, Metzner said the bank should have known about the trades via data from its internal control systems.
6) "Unless you claim that all of Jerome Kerviel's operational hierarchy was blind, all the recipients of this data, and they were numerous, could not help but see" what Kerviel was doing, Metzner said.
7) "Unless," he added, "they didn't want to look."
8) There was no immediate response from the investigating judges.
9) A lawyer for Societe Generale, Jean Veil, dismissed Metzner's note as a repetition of previous appeals by Kerviel's lawyers.
10) Kerviel shot to infamy in January 2008 after Societe Generale accused him of inflicting the French bank with a loss of euro4.9 billion in one of history's biggest trading scandals. The 32-year-old is facing preliminary charges for forgery, breach of trust and unauthorized computer use.
2009-05-07
French bank Societe Generale posts 1Q loss
(APW_ENG_20090507.0351)
1) French bank Societe Generale said Thursday it returned to a loss in the first quarter after the further devaluation of its U.S. real estate-linked assets caused it to take nearly euro2 billion ($2.7 billion) in new writedowns and provisions.
2) Paris-based Societe Generale, which had struggled to return to profitability last year after losing billions of euros in a massive trading scandal, reported a net loss of euro278 million in the first quarter, down from a euro1.1 billion profit a year earlier.
3) The bank, whose chairman announced his resignation last week, blamed the downturn in the U.S. real estate market, ratings downgrades of bond insurers, and what it called its own "tighter valuation assumptions" for euro1.5 billion in new losses and writedowns in its investment banking division.
4) Societe Generale's loss comes in stark contrast to larger French rival BNP Paribas, which Wednesday reported a quarterly profit of euro1.56 billion. In a statement, it forecast that the global economic recession would continue to weigh on banks' performance this year and said "Societe Generale will not be immune from this trend."
5) The bank's loss also contrasted with reassuring comments from Societe Generale's chief executive during the quarter. Presenting the 2008 results in February, Frederic Oudea said "Overall when I see how we entered 2009, I think we are in good shape in relative terms compared with our peers."
6) In its statement, Societe Generale predicted its cost of risk will remain high this year and didn't rule out additional writedowns, although those taken in the first quarter "already reflect the current deterioration in the U.S. real estate market and monoline (bond) insurer counterparties."
7) Societe Generale shares fell 18 percent during the first quarter, but have jumped 45 percent since then as stock markets have rebounded globally on hopes that the worst of the financial crisis is over.
8) The bank also said it has decided to participate in the second round of the French government's plan to recapitalize the country's banks. Societe Generale received euro1.7 billion in the first round last December, when France pumped a total of euro10.5 billion into six of the country's largest lenders.
9) The investment banking division reported a loss of euro414 million, down from earnings of euro141 million a year ago, while sales slumped 46 percent to euro841 million.
10) The bank's domestic retail banking business saw earnings slump 29 percent to euro216 million, on a 1 percent slide in revenue to euro1.73 billion.
11) Announcing his resignation last week, Societe Generale chairman Daniel Bouton said his aim in leaving was to protect the bank, and that it was "better for me to withdraw, proud of having led a wonderful company."
12) Bouton was Societe Generale's chief executive in January 2008, when the bank announced one of the world's largest trading scandals, which caused a massive loss. He stepped down as CEO last May but had remained as chairman.
13) Oudea is to take on the chairman's duties May 24, while keeping his job as CEO.
14) Splitting the two roles had been one of Societe Generale's responses to the firestorm that erupted at the bank in late January 2008, when it announced losses of almost euro5 billion (more than $7 billion) in the trading scandal it has blamed on unauthorized deals by a single trader, Jerome Kerviel.
15) Kerviel maintains that his superiors were aware of his risky transactions but looked the other way while he was earning big money for the bank, intervening only when he started to lose. The bank insists Kerviel was acting alone.
16) Two investigating judges wrapped up a yearlong probe into the case last January but have not yet announced any findings.
French bank Societe Generale posts 1Q loss
(APW_ENG_20090507.0542)
1) French bank Societe Generale said Thursday it returned to a loss in the first quarter after the further devaluation of assets linked to U.S. real estate caused it to take nearly euro2 billion ($2.7 billion) in new writedowns and provisions.
2) Paris-based Societe Generale, which had struggled to return to profitability last year after losing billions of euros in a massive trading scandal, reported a net loss of euro278 million in the first quarter, down from a euro1.1 billion profit a year earlier.
3) The bank, whose chairman announced his resignation last week, blamed the downturn in the U.S. real estate market, ratings downgrades of bond insurers, and what it called its own "tighter valuation assumptions" for euro1.5 billion in new losses and writedowns in its investment banking division.
4) Investors dumped the company's shares, and at midday the stock was down 4.3 percent at euro41.88.
5) Societe Generale's loss comes in stark contrast to larger French rival BNP Paribas, which Wednesday reported a quarterly profit of euro1.56 billion. In a statement, it forecast that the global economic recession would continue to weigh on banks' performance this year and said "Societe Generale will not be immune from this trend."
6) Speaking at a news conference at the bank's headquarters near Paris, CEO Frederic Oudea declined to explain why the financial crisis had hurt Societe Generale so much more than rivals like BNP Paribas in the first quarter.
7) "I haven' studied BNP's results line-by-line, but I believe they also took some depreciations," Oudea said, "I can't comment beyond that."
8) The bank's loss also contrasted with reassuring comments from the CEO over the first three months of the year. Presenting the 2008 results in February, Oudea said "Overall when I see how we entered 2009, I think we are in good shape in relative terms compared with our peers."
9) In its statement, Societe Generale predicted its cost of risk will remain high this year and didn't rule out additional writedowns, although those taken in the first quarter "already reflect the current deterioration in the U.S. real estate market and monoline (bond) insurer counterparties."
10) Societe Generale shares fell 18 percent during the first quarter, but have jumped 45 percent since then as stock markets have rebounded globally on hopes that the worst of the financial crisis is over.
11) The bank also said it has decided to participate in the second round of the French government's plan to recapitalize the country's banks. Societe Generale received euro1.7 billion in the first round last December, when France pumped a total of euro10.5 billion into six of the country's largest lenders.
12) The investment banking division reported a loss of euro414 million, down from earnings of euro141 million a year ago, while sales slumped 46 percent to euro841 million.
13) The bank's domestic retail banking business saw earnings slump 29 percent to euro216 million, on a 1 percent slide in revenue to euro1.73 billion.
14) Announcing his resignation last week, Societe Generale chairman Daniel Bouton said his aim in leaving was to protect the bank, and that it was "better for me to withdraw, proud of having led a wonderful company."
15) Bouton was Societe Generale's chief executive in January 2008, when the bank announced one of the world's largest trading scandals, which caused a massive loss. He stepped down as CEO last May but had remained as chairman.
16) Oudea is to take on the chairman's duties May 24, while keeping his job as CEO.
17) Splitting the two roles had been one of Societe Generale's responses to the firestorm that erupted at the bank in late January 2008, when it announced losses of almost euro5 billion (more than $7 billion) in the trading scandal it has blamed on unauthorized deals by a single trader, Jerome Kerviel.
18) Kerviel maintains that his superiors were aware of his risky transactions but looked the other way while he was earning big money for the bank, intervening only when he started to lose. The bank insists Kerviel was acting alone.
19) Two investigating judges wrapped up a yearlong probe into the case last January but have not yet announced any findings.
2009-08-31
French trader to stand trial over SocGen losses
(APW_ENG_20090831.0915)
1) A judicial official says French judges have ordered ex-Societe Generale trader Jerome Kerviel to stand trial over transactions that cost the bank billions of euros (dollars).
2) Kerviel is charged with forgery, breach of trust and unauthorized computer use.
3) The official says investigating judges on Monday sent the case to trial in Paris. The trial is not expected until early 2010.
4) The bank caused a firestorm when in January 2008 it announced losses of almost ⁈ion (more than $7 billion) in a scandal it blamed on unauthorized trades by a single trader, Kerviel.
5) Kerviel says his superiors were aware of his risky transactions but looked the other way while he was earning money for the bank, intervening only when he started to lose.
French trader to stand trial over SocGen losses
(APW_ENG_20090831.0916)
1) A judicial official says French judges have ordered ex-Societe Generale trader Jerome Kerviel to stand trial over transactions that cost the bank billions of euros (dollars).
2) Kerviel is charged with forgery, breach of trust and unauthorized computer use.
3) The official says investigating judges on Monday sent the case to trial in Paris. The trial is not expected until early 2010.
4) The bank caused a firestorm when in January 2008 it announced losses of almost euro5 billion (more than $7 billion) in a scandal it blamed on unauthorized trades by a single trader, Kerviel.
5) Kerviel says his superiors were aware of his risky transactions but looked the other way while he was earning money for the bank, intervening only when he started to lose.
French trader to stand trial over SocGen losses
(APW_ENG_20090831.0957)
1) French judges on Monday ordered ex-Societe Generale trader Jerome Kerviel to stand trial over transactions that cost the bank billions of euros (dollars), a judicial official said.
2) Kerviel is charged with forgery, breach of trust and unauthorized computer use. He risks up to five years in prison and ⁈0 in fines if convicted.
3) Investigating judges on Monday sent the case to trial in Paris, an official said. The trial is not expected until early 2010. The official spoke on condition of anonymity because of judicial rules.
4) Societe Generale caused a firestorm when amid market turmoil in January 2008 it announced one of history's biggest trading losses, totaling almost ⁈ion (more than $7 billion), in a scandal it blamed on unauthorized trades by a single trader, Kerviel.
5) Kerviel says his superiors were aware of his risky transactions but looked the other way while he was earning money for the bank, intervening only when he started to lose. The bank insists Kerviel was acting alone.
6) French investigators wrapped up their yearlong probe in January. The Paris prosecutor's office requested in June that Kerviel stand trial, and judges Renaud Van Ruymbeke and Francoise Desset finalized the decision with a formal order Monday.
7) Jean Veil, lawyer for Societe Generale, welcomed the decision.
8) Though he hadn't yet seen the judges' order, he said it appeared that "Societe Generale's thesis was confirmed by the judges."
9) One of Kerviel's lawyers, Francis Tissot, called the move "regrettable" but would not further comment.
10) Kerviel was in jail for six weeks in 2008 at the start of the probe but was released under judicial supervision.
11) Employed at the bank since 2000, Kerviel worked his way up from a desk that monitors traders to a job on the futures desk where he invested the bank's money by hedging on European equity market indices. Judges investigated some ⁈lion of what Societe Generale says were unauthorized trade positions held by Kerviel.
French trader to stand trial over SocGen losses
(APW_ENG_20090831.0958)
1) French judges on Monday ordered ex-Societe Generale trader Jerome Kerviel to stand trial over transactions that cost the bank billions of euros (dollars), a judicial official said.
2) Kerviel is charged with forgery, breach of trust and unauthorized computer use. He risks up to five years in prison and euro375,000 in fines if convicted.
3) Investigating judges on Monday sent the case to trial in Paris, an official said. The trial is not expected until early 2010. The official spoke on condition of anonymity because of judicial rules.
4) Societe Generale caused a firestorm when amid market turmoil in January 2008 it announced one of history's biggest trading losses, totaling almost euro5 billion (more than $7 billion), in a scandal it blamed on unauthorized trades by a single trader, Kerviel.
5) Kerviel says his superiors were aware of his risky transactions but looked the other way while he was earning money for the bank, intervening only when he started to lose. The bank insists Kerviel was acting alone.
6) French investigators wrapped up their yearlong probe in January. The Paris prosecutor's office requested in June that Kerviel stand trial, and judges Renaud Van Ruymbeke and Francoise Desset finalized the decision with a formal order Monday.
7) Jean Veil, lawyer for Societe Generale, welcomed the decision.
8) Though he hadn't yet seen the judges' order, he said it appeared that "Societe Generale's thesis was confirmed by the judges."
9) One of Kerviel's lawyers, Francis Tissot, called the move "regrettable" but would not further comment.
10) Kerviel was in jail for six weeks in 2008 at the start of the probe but was released under judicial supervision.
11) Employed at the bank since 2000, Kerviel worked his way up from a desk that monitors traders to a job on the futures desk where he invested the bank's money by hedging on European equity market indices. Judges investigated some euro50 billion of what Societe Generale says were unauthorized trade positions held by Kerviel.
French trader to stand trial over SocGen losses
(APW_ENG_20090831.1025)
1) French judges on Monday ordered ex-Societe Generale trader Jerome Kerviel to stand trial next year over transactions that cost the bank billions of euros (dollars), in a case that drew attention to a culture of risk-taking blamed for feeding the financial crisis.
2) The bank, whose chairman quit in the aftermath of one of the world's costliest trading scandals, welcomed the move. Kerviel argues that his superiors knew about his daring transactions, though Societe Generale says he acted alone.
3) A judicial official said investigating judges on Monday sent the case to a Paris court, wrapping up more than a year of investigation and high-profile legal battles. The trial is expected in early 2010. The official spoke on condition of anonymity because of judicial rules.
4) Kerviel, charged with forgery, breach of trust and unauthorized computer use, faces up to five years in prison and ⁈0 in fines if convicted.
5) The official said the judges threw out prosecutors' request to send Kerviel's assistant, Thomas Mougard, to trial as well. He was accused of "complicity in introducing fraudulent data in a computer system."
6) Societe Generale SA, one of France's biggest banks, caused a firestorm when it announced in January 2008 that it lost nearly ⁈ion (more than $7 billion) unwinding what it said were unauthorized positions held by Kerviel. The affair rattled an already uneasy banking sector and prompted widespread calls for tighter internal controls at banks.
7) Kerviel says his superiors were aware of his positions but looked the other way while he was earning money for the bank, intervening only when he started to lose. French investigators wrapped up their yearlong probe in January. The Paris prosecutor's office requested in June that Kerviel stand trial, and judges Renaud Van Ruymbeke and Francoise Desset finalized the decision with a formal order Monday, the judicial official said.
8) Jean Veil, lawyer for SocGen, welcomed the decision.
9) Though he hadn't yet seen the judges' order, he said it appeared that "Societe Generale's thesis was confirmed."
10) One of Kerviel's lawyers, Francis Tissot, called the move "regrettable" but would not comment further.
11) Kerviel was in jail for six weeks in 2008 at the start of the probe, then was released under judicial supervision.
12) Employed at the bank since 2000, Kerviel worked his way up from a desk that monitors traders to a job on the futures desk where he invested the bank's money by hedging on European equity market indices. Judges investigated some ⁈lion of what Societe Generale says were his unauthorized trading positions.
13) France's central bank fined Societe Generale ⁈ion for "serious shortcomings" in its internal controls that led to the trading losses. The Bank of France also issued a formal warning saying shortcomings in "hierarchical controls" for extended periods in 2007 fueled the problem.
French trader to stand trial over SocGen losses
(APW_ENG_20090831.1026)
1) French judges on Monday ordered ex-Societe Generale trader Jerome Kerviel to stand trial next year over transactions that cost the bank billions of euros (dollars), in a case that drew attention to a culture of risk-taking blamed for feeding the financial crisis.
2) The bank, whose chairman quit in the aftermath of one of the world's costliest trading scandals, welcomed the move. Kerviel argues that his superiors knew about his daring transactions, though Societe Generale says he acted alone.
3) A judicial official said investigating judges on Monday sent the case to a Paris court, wrapping up more than a year of investigation and high-profile legal battles. The trial is expected in early 2010. The official spoke on condition of anonymity because of judicial rules.
4) Kerviel, charged with forgery, breach of trust and unauthorized computer use, faces up to five years in prison and euro375,000 in fines if convicted.
5) The official said the judges threw out prosecutors' request to send Kerviel's assistant, Thomas Mougard, to trial as well. He was accused of "complicity in introducing fraudulent data in a computer system."
6) Societe Generale SA, one of France's biggest banks, caused a firestorm when it announced in January 2008 that it lost nearly euro5 billion (more than $7 billion) unwinding what it said were unauthorized positions held by Kerviel. The affair rattled an already uneasy banking sector and prompted widespread calls for tighter internal controls at banks.
7) Kerviel says his superiors were aware of his positions but looked the other way while he was earning money for the bank, intervening only when he started to lose. French investigators wrapped up their yearlong probe in January. The Paris prosecutor's office requested in June that Kerviel stand trial, and judges Renaud Van Ruymbeke and Francoise Desset finalized the decision with a formal order Monday, the judicial official said.
8) Jean Veil, lawyer for SocGen, welcomed the decision.
9) Though he hadn't yet seen the judges' order, he said it appeared that "Societe Generale's thesis was confirmed."
10) One of Kerviel's lawyers, Francis Tissot, called the move "regrettable" but would not comment further.
11) Kerviel was in jail for six weeks in 2008 at the start of the probe, then was released under judicial supervision.
12) Employed at the bank since 2000, Kerviel worked his way up from a desk that monitors traders to a job on the futures desk where he invested the bank's money by hedging on European equity market indices. Judges investigated some euro50 billion of what Societe Generale says were his unauthorized trading positions.
13) France's central bank fined Societe Generale euro4 million for "serious shortcomings" in its internal controls that led to the trading losses. The Bank of France also issued a formal warning saying shortcomings in "hierarchical controls" for extended periods in 2007 fueled the problem.
2009-09-01
French trader to stand trial over SocGen losses
(APW_ENG_20090901.0006)
1) French judges have ordered ex-Societe Generale trader Jerome Kerviel to stand trial next year over transactions that cost the bank billions of euros (dollars), in a case that drew attention to a culture of risk-taking blamed for feeding the financial crisis.
2) The bank, whose chairman quit in the aftermath of one of the world's costliest trading scandals, welcomed the move. Kerviel argues that his superiors knew about his daring transactions, though Societe Generale says he acted alone.
3) A judicial official said investigating judges on Monday sent the case to a Paris court, wrapping up more than a year of investigation and high-profile legal battles. The trial is expected in early 2010. The official spoke on condition of anonymity because of judicial rules.
4) Kerviel, charged with forgery, breach of trust and unauthorized computer use, faces up to five years in prison and ⁈0 in fines if convicted.
5) The official said the judges threw out prosecutors' request to send Kerviel's assistant, Thomas Mougard, to trial as well. He was accused of "complicity in introducing fraudulent data in a computer system."
6) Societe Generale SA, one of France's biggest banks, caused a firestorm when it announced in January 2008 that it lost nearly ⁈ion (more than $7 billion) unwinding what it said were unauthorized positions held by Kerviel. The affair rattled an already uneasy banking sector and prompted widespread calls for tighter internal controls at banks.
7) Kerviel says his superiors were aware of his positions but looked the other way while he was earning money for the bank, intervening only when he started to lose. French investigators wrapped up their yearlong probe in January. The Paris prosecutor's office requested in June that Kerviel stand trial, and judges Renaud Van Ruymbeke and Francoise Desset finalized the decision with a formal order Monday, the judicial official said.
8) Jean Veil, lawyer for SocGen, welcomed the decision.
9) Though he hadn't yet seen the judges' order, he said it appeared that "Societe Generale's thesis was confirmed."
10) One of Kerviel's lawyers, Francis Tissot, called the move "regrettable" but would not comment further.
11) Kerviel was in jail for six weeks in 2008 at the start of the probe, then was released under judicial supervision.
12) Employed at the bank since 2000, Kerviel worked his way up from a desk that monitors traders to a job on the futures desk where he invested the bank's money by hedging on European equity market indices. Judges investigated some ⁈lion of what Societe Generale says were his unauthorized trading positions.
13) France's central bank fined Societe Generale ⁈ion for "serious shortcomings" in its internal controls that led to the trading losses. The Bank of France also issued a formal warning saying shortcomings in "hierarchical controls" for extended periods in 2007 fueled the problem.
French trader to stand trial over SocGen losses
(APW_ENG_20090901.0009)
1) French judges have ordered ex-Societe Generale trader Jerome Kerviel to stand trial next year over transactions that cost the bank billions of euros (dollars), in a case that drew attention to a culture of risk-taking blamed for feeding the financial crisis.
2) The bank, whose chairman quit in the aftermath of one of the world's costliest trading scandals, welcomed the move. Kerviel argues that his superiors knew about his daring transactions, though Societe Generale says he acted alone.
3) A judicial official said investigating judges on Monday sent the case to a Paris court, wrapping up more than a year of investigation and high-profile legal battles. The trial is expected in early 2010. The official spoke on condition of anonymity because of judicial rules.
4) Kerviel, charged with forgery, breach of trust and unauthorized computer use, faces up to five years in prison and euro375,000 in fines if convicted.
5) The official said the judges threw out prosecutors' request to send Kerviel's assistant, Thomas Mougard, to trial as well. He was accused of "complicity in introducing fraudulent data in a computer system."
6) Societe Generale SA, one of France's biggest banks, caused a firestorm when it announced in January 2008 that it lost nearly euro5 billion (more than $7 billion) unwinding what it said were unauthorized positions held by Kerviel. The affair rattled an already uneasy banking sector and prompted widespread calls for tighter internal controls at banks.
7) Kerviel says his superiors were aware of his positions but looked the other way while he was earning money for the bank, intervening only when he started to lose. French investigators wrapped up their yearlong probe in January. The Paris prosecutor's office requested in June that Kerviel stand trial, and judges Renaud Van Ruymbeke and Francoise Desset finalized the decision with a formal order Monday, the judicial official said.
8) Jean Veil, lawyer for SocGen, welcomed the decision.
9) Though he hadn't yet seen the judges' order, he said it appeared that "Societe Generale's thesis was confirmed."
10) One of Kerviel's lawyers, Francis Tissot, called the move "regrettable" but would not comment further.
11) Kerviel was in jail for six weeks in 2008 at the start of the probe, then was released under judicial supervision.
12) Employed at the bank since 2000, Kerviel worked his way up from a desk that monitors traders to a job on the futures desk where he invested the bank's money by hedging on European equity market indices. Judges investigated some euro50 billion of what Societe Generale says were his unauthorized trading positions.
13) France's central bank fined Societe Generale euro4 million for "serious shortcomings" in its internal controls that led to the trading losses. The Bank of France also issued a formal warning saying shortcomings in "hierarchical controls" for extended periods in 2007 fueled the problem.
Lawyers hail ruling in SocGen trader case
(APW_ENG_20090901.1022)
1) Defense lawyers say France's top court has agreed to hear an appeal from former Societe Generale trader Jerome Kerviel before he can stand trial for alleged wrongdoing behind huge bank losses.
2) The lawyers said Tuesday that the Court of Cassation will hear their appeal for alleged "excess of power" by investigating judges. The defense insists magistrates relied too heavily on evidence provided by the bank.
3) The magistrates sent their case Monday to a Paris court, and a trial is expected in 2010.
4) Societe Generale said in January 2008 it lost nearly ⁈ion ($7.4 billion at the time) cleaning up what it said were unauthorized positions held by Kerviel.
5) The case exposed a culture of risk-taking blamed for feeding the financial crisis.
Lawyers hail ruling in SocGen trader case
(APW_ENG_20090901.1023)
1) Defense lawyers say France's top court has agreed to hear an appeal from former Societe Generale trader Jerome Kerviel before he can stand trial for alleged wrongdoing behind huge bank losses.
2) The lawyers said Tuesday that the Court of Cassation will hear their appeal for alleged "excess of power" by investigating judges. The defense insists magistrates relied too heavily on evidence provided by the bank.
3) The magistrates sent their case Monday to a Paris court, and a trial is expected in 2010.
4) Societe Generale said in January 2008 it lost nearly euro5 billion ($7.4 billion at the time) cleaning up what it said were unauthorized positions held by Kerviel.
5) The case exposed a culture of risk-taking blamed for feeding the financial crisis.
2009-11-10
Societe Generale trader fails to get trial delayed
(APW_ENG_20091110.0621)
1) A French court has rejected a bid by former trader Jerome Kerviel to avoid going to trial over heavy losses at bank Societe Generale.
2) The ruling Tuesday by the Court of Cassation means Kerviel will go to trial next year. No date has been set.
3) Kerviel's lawyer Olivier Metzner filed an appeal in September, saying the trial should not take place because the investigating judges relied too heavily on evidence provided by the bank.
4) Societe Generale said in January 2008 it lost nearly ⁈ion ($7.4 billion at the time) cleaning up what it said were unauthorized trades by Kerviel. The case exposed a culture of risk-taking blamed for feeding the financial crisis.
5) Kerviel is charged with forgery, breach of trust and unauthorized computer use.
Societe Generale trader fails to get trial delayed
(APW_ENG_20091110.0622)
1) A French court has rejected a bid by former trader Jerome Kerviel to avoid going to trial over heavy losses at bank Societe Generale.
2) The ruling Tuesday by the Court of Cassation means Kerviel will go to trial next year. No date has been set.
3) Kerviel's lawyer Olivier Metzner filed an appeal in September, saying the trial should not take place because the investigating judges relied too heavily on evidence provided by the bank.
4) Societe Generale said in January 2008 it lost nearly euro5 billion ($7.4 billion at the time) cleaning up what it said were unauthorized trades by Kerviel. The case exposed a culture of risk-taking blamed for feeding the financial crisis.
5) Kerviel is charged with forgery, breach of trust and unauthorized computer use.
2010-01-06
Ex-SocGen trader Kerviel to stand trial in June
(APW_ENG_20100106.0857)
1) A Paris court says former Societe Generale trader Jerome Kerviel is expected to stand trial in June on charges connected to a multibillion-euro (-dollar) trading scandal.
2) The court said Wednesday the exact dates of the three-week trial will be set in February.
3) Societe Generale accused Kerviel of betting tens of billions of euros of the bank's money without permission, which led to almost (EURO)5 billion (more than $7 billion) in losses once the bank unwound his positions in January 2008.
4) Kerviel argues his superiors knew about his risky transactions. Societe Generale says he acted alone.
5) Kerviel was charged with forgery, breach of trust and unauthorized computer use. He faces up to five years in prison and (EURO)375,000 ($538,000) in fines, if convicted.
Ex-SocGen trader Kerviel to stand trial in June
(APW_ENG_20100106.0858)
1) A Paris court says former Societe Generale trader Jerome Kerviel is expected to stand trial in June on charges connected to a multibillion-euro (-dollar) trading scandal.
2) The court said Wednesday the exact dates of the three-week trial will be set in February.
3) Societe Generale accused Kerviel of betting tens of billions of euros of the bank's money without permission, which led to almost euro5 billion (more than $7 billion) in losses once the bank unwound his positions in January 2008.
4) Kerviel argues his superiors knew about his risky transactions. Societe Generale says he acted alone.
5) Kerviel was charged with forgery, breach of trust and unauthorized computer use. He faces up to five years in prison and euro375,000 ($538,000) in fines, if convicted.
2010-02-12
Ex-French bank trader Kerviel on trial in June
(APW_ENG_20100212.0627)
1) Former trader Jerome Kerviel will stand trial June 8-23 on charges connected to a multibillion-euro (dollar) trading scandal at France's Societe Generale bank.
2) A Paris court set the dates Friday.
3) Societe Generale says Kerviel secretly risked tens of billions of euros of the bank's money in trades, which led to nearly (EURO)5 billion ($6.8 billion) in losses once the bank unwound his positions in January 2008.
4) Kerviel argues his superiors knew about his risk-taking, a claim the bank denies.
5) Kerviel was charged with forgery, breach of trust and unauthorized computer use. He faces up to five years in prison and (EURO)375,000 ($538,000) in fines, if convicted.
Ex-French bank trader Kerviel on trial in June
(APW_ENG_20100212.0628)
1) Former trader Jerome Kerviel will stand trial June 8-23 on charges connected to a multibillion-euro (dollar) trading scandal at France's Societe Generale bank.
2) A Paris court set the dates Friday.
3) Societe Generale says Kerviel secretly risked tens of billions of euros of the bank's money in trades, which led to nearly euro5 billion ($6.8 billion) in losses once the bank unwound his positions in January 2008.
4) Kerviel argues his superiors knew about his risk-taking, a claim the bank denies.
5) Kerviel was charged with forgery, breach of trust and unauthorized computer use. He faces up to five years in prison and euro375,000 ($538,000) in fines, if convicted.
2010-05-02
Former French trader seeks support ahead of trial
(APW_ENG_20100502.0373)
1) Former Societe General trader Jerome Kerviel is appealing to players in France's financial world to speak out on his behalf when he stands trial next month on charges connected to a multibillion-euro (dollar) trading scandal.
2) Kerviel, accused of betting tens of billions of euros of the bank's money in spectacularly risky trades, told Sunday newspaper Le Journal du Dimanche that he often meets people in finance or academics who privately agree with his take on the scandal but refuse to support him publicly "because they are afraid of reprisals or losing their job."
3) "The financial milieu is very closed, they can't say openly that Societe Generale's account of things doesn't hold up," he was quoted as saying.
4) Kerviel's legal team has insisted his higher-ups were aware of what he was doing and did not stop him as long as he made money for the bank -- charges the bank has always denied.
5) Societe Generale says Kerviel secretly risked tens of billions of euros of the bank's money in trades, which led to nearly (EURO)5 billion in losses once the bank unwound his positions in January 2008.
6) Kerviel's interview in Le Journal du Dimanche launched a series of planned appearances to promote his book, "L'Engrenage: Memoires d'un trader" (The Spiral: Memoirs of a Trader), which comes out Wednesday.
7) In the interview, Kerviel insisted that he made his risky trades not for his own gain but for that of the bank. He also said that today he works for a computer technology company earning (EURO)2,300 (US$3,000) a month.
8) Kerviel, who risks five years in prison as well as fines and damages if convicted, has been charged with forgery, breach of trust and unauthorized computer use. His trial starts June 8.
Former French trader seeks support ahead of trial
(APW_ENG_20100502.0374)
1) Former Societe General trader Jerome Kerviel is appealing to players in France's financial world to speak out on his behalf when he stands trial next month on charges connected to a multibillion-euro (dollar) trading scandal.
2) Kerviel, accused of betting tens of billions of euros of the bank's money in spectacularly risky trades, told Sunday newspaper Le Journal du Dimanche that he often meets people in finance or academics who privately agree with his take on the scandal but refuse to support him publicly "because they are afraid of reprisals or losing their job."
3) "The financial milieu is very closed, they can't say openly that Societe Generale's account of things doesn't hold up," he was quoted as saying.
4) Kerviel's legal team has insisted his higher-ups were aware of what he was doing and did not stop him as long as he made money for the bank -- charges the bank has always denied.
5) Societe Generale says Kerviel secretly risked tens of billions of euros of the bank's money in trades, which led to nearly euro5 billion in losses once the bank unwound his positions in January 2008.
6) Kerviel's interview in Le Journal du Dimanche launched a series of planned appearances to promote his book, "L'Engrenage: Memoires d'un trader" (The Spiral: Memoirs of a Trader), which comes out Wednesday.
7) In the interview, Kerviel insisted that he made his risky trades not for his own gain but for that of the bank. He also said that today he works for a computer technology company earning euro2,300 (US$3,000) a month.
8) Kerviel, who risks five years in prison as well as fines and damages if convicted, has been charged with forgery, breach of trust and unauthorized computer use. His trial starts June 8.
2010-05-05
Societe Generale says Greek exposure is $3.9B
(APW_ENG_20100505.0372)
1) French bank Societe Generale SA said Wednesday its exposure to Greece's government debt is (EURO)3 billion ($3.93 billion) and it has tightened credit at its Greek unit in response to the financial crisis there.
2) The bank based in Paris said in a statement that the financial crisis had hurt the performance of its majority-owned Geniki Bank Greek subsidiary in the first quarter, and that it was tightening loan approval conditions there among other precautionary measures.
3) Societe Generale disclosed the Greek exposure alongside its first quarter earnings report which showed it made a net profit of (EURO)1.06 billion ($1.39 billion) in the period. That compared to a (EURO)278 million loss in the year-earlier quarter, when the bank's earnings were hammered by nearly (EURO)2 billion in writedowns and provisions on the devalued assets linked to U.S. real estate.
4) The bank warned that "the pick-up in activity in developed European countries is much less pronounced than in the other areas of the world," and said European governments' efforts to reduce public deficits and debt is likely to weigh on the zone's near-term economic prospects.
5) Societe Generale owns 54 percent of Athens' based Geniki Bank, which it bought in 2004. The Greek financial crisis that has spilled over into other parts of Europe "had a considerable impact" on the bank's performance in the first quarter, Societe Generale said.
6) "In light of this situation, the group has implemented a number of precautionary measures, in particular tightening its loan approval conditions and cutting costs," Societe Generale said.
7) Higher risk provisions due to the Greek crisis helped push earnings in Societe Generale's international retail banking division down 5.8 percent in the first quarter.
8) Corporate and investment banking, the largest contributor to Societe Generale's revenue and profit, benefited from a gradual return to pre-crisis market conditions, the bank said. The division posted net profit of (EURO)541 million in the quarter, compared to a (EURO)171 million loss in the year earlier period. Revenue rose 74 percent to (EURO)2.1 billion.
9) Societe Generale reconfirmed its aim to improve earnings this year, after 2009 earnings were slashed to (EURO)678 million from (EURO)2.01 billion in 2008, a year when governments pumped billions into banks to prevent further meltdown after some of Wall Street's most storied names collapsed.
10) Societe Generale slowly has been recovering from a trading scandal in 2008 that saw it lose billions of euros.
11) SocGen announced in January 2008 that it lost nearly (EURO)5 billion (more than $7 billion) unwinding what it said were unauthorized positions held be a single trader, Jerome Kerviel. The affair rattled an already uneasy banking sector and prompted widespread calls for tighter internal controls at banks.
12) Kerviel goes on trial next month, charged with forgery, breach of trust and unauthorized computer use. The former trader's legal team has insisted his higher-ups were aware of what he was doing and did not stop him as long as he made money for the bank -- charges the bank has always denied.
Societe Generale says Greek exposure is $3.9B
(APW_ENG_20100505.0373)
1) French bank Societe Generale SA said Wednesday its exposure to Greece's government debt is euro3 billion ($3.93 billion) and it has tightened credit at its Greek unit in response to the financial crisis there.
2) The bank based in Paris said in a statement that the financial crisis had hurt the performance of its majority-owned Geniki Bank Greek subsidiary in the first quarter, and that it was tightening loan approval conditions there among other precautionary measures.
3) Societe Generale disclosed the Greek exposure alongside its first quarter earnings report which showed it made a net profit of euro1.06 billion ($1.39 billion) in the period. That compared to a euro278 million loss in the year-earlier quarter, when the bank's earnings were hammered by nearly euro2 billion in writedowns and provisions on the devalued assets linked to U.S. real estate.
4) The bank warned that "the pick-up in activity in developed European countries is much less pronounced than in the other areas of the world," and said European governments' efforts to reduce public deficits and debt is likely to weigh on the zone's near-term economic prospects.
5) Societe Generale owns 54 percent of Athens' based Geniki Bank, which it bought in 2004. The Greek financial crisis that has spilled over into other parts of Europe "had a considerable impact" on the bank's performance in the first quarter, Societe Generale said.
6) "In light of this situation, the group has implemented a number of precautionary measures, in particular tightening its loan approval conditions and cutting costs," Societe Generale said.
7) Higher risk provisions due to the Greek crisis helped push earnings in Societe Generale's international retail banking division down 5.8 percent in the first quarter.
8) Corporate and investment banking, the largest contributor to Societe Generale's revenue and profit, benefited from a gradual return to pre-crisis market conditions, the bank said. The division posted net profit of euro541 million in the quarter, compared to a euro171 million loss in the year earlier period. Revenue rose 74 percent to euro2.1 billion.
9) Societe Generale reconfirmed its aim to improve earnings this year, after 2009 earnings were slashed to euro678 million from euro2.01 billion in 2008, a year when governments pumped billions into banks to prevent further meltdown after some of Wall Street's most storied names collapsed.
10) Societe Generale slowly has been recovering from a trading scandal in 2008 that saw it lose billions of euros.
11) SocGen announced in January 2008 that it lost nearly euro5 billion (more than $7 billion) unwinding what it said were unauthorized positions held be a single trader, Jerome Kerviel. The affair rattled an already uneasy banking sector and prompted widespread calls for tighter internal controls at banks.
12) Kerviel goes on trial next month, charged with forgery, breach of trust and unauthorized computer use. The former trader's legal team has insisted his higher-ups were aware of what he was doing and did not stop him as long as he made money for the bank -- charges the bank has always denied.
2010-06-07
Accused French rogue trader Kerviel to stand trial
(APW_ENG_20100607.0282)
1) Jerome Kerviel says he's living the simple life these days. The former French trader accused of gambling away billions of his bank's money has a job in the suburbs making (EURO)2,300 ($2,700) a month. He doesn't take vacations. His adrenaline-fueled life on the trading floor seems far away.
2) Two and a half years after the scandal broke, Kerviel goes on trial in Paris on Tuesday, accused by Societe Generale SA of risking tens of billions of euros of its money in trades that led to nearly (EURO)5 billion (more than $7 billion) in losses once the bank unwound his positions in January 2008.
3) At the time it was considered history's biggest trading fraud, but it was soon dwarfed by a global financial crisis, the fall of Lehman Brothers and the Bernard L. Madoff multibillion-dollar Ponzi scheme.
4) Kerviel, the accused rogue trader, already has hammered out his defense in a book and interviews with French media, casting himself as an everyman who got carried away, a scapegoat for the bank, the victim of an out-of-control banking system.
5) It's a tactic that seems crafted to tap into popular discontent at a time of ongoing financial scandals and economic turmoil. His case destabilized the banking sector, already on the verge of the 2008 meltdown, and heightened pressure for better financial regulation, still high on today's agenda for governments worldwide.
6) Helping along that message is the 33-year-old's standing as an anti-hero in France. The son of a metalworker and a hairdresser, Kerviel grew up in the provinces and lacked the snooty education usually required for coveted trading jobs, yet he nonetheless managed to humiliate a banking powerhouse and expose the weakness of its controls.
7) A few bank executives resigned in the scandal's aftermath, including longtime Chairman Daniel Bouton. Kerviel's superiors were questioned in the probe, but none of them face charges.
8) Kerviel's dark-haired Gallic good looks also helped his mystique: T-shirts were sold proclaiming their wearers "Jerome Kerviel's girlfriend."
9) The former futures trader's defense contends his supervisors were aware of his risks but did not stop them as long as he was making money for Societe Generale. The bank denies that claim.
10) In Kerviel's book out last month, "L'Engrenage: Memoires d'un trader" ("The Spiral: Memoirs of a Trader"), he compared his former job to prostitution -- with his superiors eagerly counting his days' earnings -- and likened that milieu to a "great banking orgy."
11) Kerviel is charged with forgery, breach of trust and unauthorized computer use. He risks five years in prison as well as a fine of (EURO)375,000 ($448,000) if convicted.
12) Societe Generale lawyer Jean Veil told the Sunday paper Le Journal du Dimanche that the bank would also ask for (EURO)4.9 billion in damages, the amount lost in the scandal's aftermath, though he acknowledged that realistically Kerviel couldn't pay it. The massive sum earned Kerviel a nickname, "the 5-billion-euro man."
13) Among the defense arguments expected in court, Kerviel has argued that the bank was trying to deflect attention from subprime-related losses by making him a scapegoat.
14) Societe Generale secretly began unwinding some 50 billion euros ($78 billion) of Kerviel's positions on Jan. 21, 2008, when U.S. markets were closed because of Martin Luther King Day, putting massive pressure on futures markets and exacerbating its losses. That week was marked by turmoil in financial markets worldwide.
15) The bank revealed its actions three days later, when it also announced subprime-related writedowns and provisions of (EURO)2.05 billion. Societe Generale's legal team has said it is absurd to claim the bank was seeking to hide its subprime exposure.
16) Societe Generale has been gradually recovering from the trading scandal, but it's been an up-and-down ride. It successfully raised capital not long after the Kerviel affair broke, but then was hit by the global financial crisis in late 2008.
17) It weathered the meltdown better than some, and paid back its state loans early. This year the bank has faced another challenge -- (EURO)3 billion in exposure to Greek government debt -- but reported (EURO)1.06 billion in profit for the first quarter and is forecasting a profitable year.
18) The trial is expected to last through late June. Questions abound, including how Kerviel managed to cover up his risky trading for so long. An internal report by the bank has said managers failed to follow up on 74 different alarms about Kerviel's activities and queries from derivatives exchange Eurex.
19) And why did Kerviel take such huge risks? He is not believed to have profited personally -- he never made more than (EURO)100,000 annually, including his bonus -- and insists he only wanted to earn money for Societe Generale.
20) In an interview last month with Le Journal du Dimanche, Kerviel said his mother instilled him with a dogged sense of dedication to your job, and he often helped out in her hair salon. Kerviel has reportedly received media training for his "I'm just an average guy" strategy.
21) Asked, "How are you living these days?" Kerviel responded: "Modestly, like a lost of people," adding that he has a small apartment, doesn't go on vacation and earns (EURO)2,300 a month at a computer services company outside Paris.
Accused French rogue trader Kerviel to stand trial
(APW_ENG_20100607.0284)
1) Jerome Kerviel says he's living the simple life these days. The former French trader accused of gambling away billions of his bank's money has a job in the suburbs making euro2,300 ($2,700) a month. He doesn't take vacations. His adrenaline-fueled life on the trading floor seems far away.
2) Two and a half years after the scandal broke, Kerviel goes on trial in Paris on Tuesday, accused by Societe Generale SA of risking tens of billions of euros of its money in trades that led to nearly euro5 billion (more than $7 billion) in losses once the bank unwound his positions in January 2008.
3) At the time it was considered history's biggest trading fraud, but it was soon dwarfed by a global financial crisis, the fall of Lehman Brothers and the Bernard L. Madoff multibillion-dollar Ponzi scheme.
4) Kerviel, the accused rogue trader, already has hammered out his defense in a book and interviews with French media, casting himself as an everyman who got carried away, a scapegoat for the bank, the victim of an out-of-control banking system.
5) It's a tactic that seems crafted to tap into popular discontent at a time of ongoing financial scandals and economic turmoil. His case destabilized the banking sector, already on the verge of the 2008 meltdown, and heightened pressure for better financial regulation, still high on today's agenda for governments worldwide.
6) Helping along that message is the 33-year-old's standing as an anti-hero in France. The son of a metalworker and a hairdresser, Kerviel grew up in the provinces and lacked the snooty education usually required for coveted trading jobs, yet he nonetheless managed to humiliate a banking powerhouse and expose the weakness of its controls.
7) A few bank executives resigned in the scandal's aftermath, including longtime Chairman Daniel Bouton. Kerviel's superiors were questioned in the probe, but none of them face charges.
8) Kerviel's dark-haired Gallic good looks also helped his mystique: T-shirts were sold proclaiming their wearers "Jerome Kerviel's girlfriend."
9) The former futures trader's defense contends his supervisors were aware of his risks but did not stop them as long as he was making money for Societe Generale. The bank denies that claim.
10) In Kerviel's book out last month, "L'Engrenage: Memoires d'un trader" ("The Spiral: Memoirs of a Trader"), he compared his former job to prostitution -- with his superiors eagerly counting his days' earnings -- and likened that milieu to a "great banking orgy."
11) Kerviel is charged with forgery, breach of trust and unauthorized computer use. He risks five years in prison as well as a fine of euro375,000 ($448,000) if convicted.
12) Societe Generale lawyer Jean Veil told the Sunday paper Le Journal du Dimanche that the bank would also ask for euro4.9 billion in damages, the amount lost in the scandal's aftermath, though he acknowledged that realistically Kerviel couldn't pay it. The massive sum earned Kerviel a nickname, "the 5-billion-euro man."
13) Among the defense arguments expected in court, Kerviel has argued that the bank was trying to deflect attention from subprime-related losses by making him a scapegoat.
14) Societe Generale secretly began unwinding some 50 billion euros ($78 billion) of Kerviel's positions on Jan. 21, 2008, when U.S. markets were closed because of Martin Luther King Day, putting massive pressure on futures markets and exacerbating its losses. That week was marked by turmoil in financial markets worldwide.
15) The bank revealed its actions three days later, when it also announced subprime-related writedowns and provisions of euro2.05 billion. Societe Generale's legal team has said it is absurd to claim the bank was seeking to hide its subprime exposure.
16) Societe Generale has been gradually recovering from the trading scandal, but it's been an up-and-down ride. It successfully raised capital not long after the Kerviel affair broke, but then was hit by the global financial crisis in late 2008.
17) It weathered the meltdown better than some, and paid back its state loans early. This year the bank has faced another challenge -- euro3 billion in exposure to Greek government debt -- but reported euro1.06 billion in profit for the first quarter and is forecasting a profitable year.
18) The trial is expected to last through late June. Questions abound, including how Kerviel managed to cover up his risky trading for so long. An internal report by the bank has said managers failed to follow up on 74 different alarms about Kerviel's activities and queries from derivatives exchange Eurex.
19) And why did Kerviel take such huge risks? He is not believed to have profited personally -- he never made more than euro100,000 annually, including his bonus -- and insists he only wanted to earn money for Societe Generale.
20) In an interview last month with Le Journal du Dimanche, Kerviel said his mother instilled him with a dogged sense of dedication to your job, and he often helped out in her hair salon. Kerviel has reportedly received media training for his "I'm just an average guy" strategy.
21) Asked, "How are you living these days?" Kerviel responded: "Modestly, like a lost of people," adding that he has a small apartment, doesn't go on vacation and earns euro2,300 a month at a computer services company outside Paris.
Accused French rogue trader Kerviel to stand trial
(APW_ENG_20100607.0658)
1) Jerome Kerviel says he's living the simple life these days. The former French trader accused of gambling away billions of his bank's money has a job in the suburbs making (EURO)2,300 ($2,700) a month. He doesn't take vacations. His adrenaline-fueled life on the trading floor seems far away.
2) Two and a half years after the scandal broke, Kerviel goes on trial in Paris on Tuesday, accused by Societe Generale SA of risking tens of billions of euros of its money in trades that led to nearly (EURO)5 billion (more than $7 billion) in losses once the bank unwound his positions in January 2008.
3) At the time it was considered history's biggest trading fraud, but it was soon dwarfed by a global financial crisis, the fall of Lehman Brothers and the Bernard L. Madoff multibillion-dollar Ponzi scheme.
4) Kerviel, the accused rogue trader, already has hammered out his defense in a book and interviews with French media, casting himself as an everyman who got carried away, a scapegoat for the bank, the victim of an out-of-control banking system.
5) It's a tactic that seems crafted to tap into popular discontent at a time of ongoing financial scandals and economic turmoil. His case destabilized the banking sector, already on the verge of the 2008 meltdown, and heightened pressure for better financial regulation, still high on today's agenda for governments worldwide.
6) Helping Kerviel's strategy is the 33-year-old's standing as an anti-hero in France. The son of a metalworker and a hairdresser, Kerviel grew up in the provinces and lacked the snooty education usually required for coveted trading jobs, yet he nonetheless managed to humiliate a banking powerhouse and expose the weakness of its controls.
7) A few bank executives resigned in the scandal's aftermath, including longtime Chairman Daniel Bouton. Kerviel's superiors were questioned in the probe, but none of them face charges.
8) Kerviel's dark-haired Gallic good looks also helped his mystique: T-shirts were sold proclaiming their wearers "Jerome Kerviel's girlfriend."
9) The former futures trader's defense contends his supervisors were aware of his risks but did not stop them as long as he was making money for Societe Generale. The bank denies that claim.
10) In Kerviel's book out last month, "L'Engrenage: Memoires d'un trader" ("The Spiral: Memoirs of a Trader"), he compared his former job to prostitution -- with his superiors eagerly counting his days' earnings -- and likened that milieu to a "great banking orgy."
11) Kerviel is charged with forgery, breach of trust and unauthorized computer use. He risks five years in prison as well as a fine of (EURO)375,000 ($448,000) if convicted.
12) Societe Generale lawyer Jean Veil told the Sunday paper Le Journal du Dimanche that the bank would also ask for (EURO)4.9 billion in damages, the amount lost in the scandal's aftermath, though he acknowledged that realistically Kerviel couldn't pay it. The massive sum earned Kerviel a nickname, "the 5-billion-euro man."
13) Among the defense arguments expected in court, Kerviel has argued that the bank was trying to deflect attention from subprime-related losses by making him a scapegoat.
14) Societe Generale secretly began unwinding some 50 billion euros ($78 billion) of Kerviel's positions on Jan. 21, 2008, when U.S. markets were closed because of Martin Luther King Day, putting massive pressure on futures markets and exacerbating its losses. That week was marked by turmoil in financial markets worldwide.
15) The bank revealed its actions three days later, when it also announced subprime-related writedowns and provisions of (EURO)2.05 billion. Societe Generale's legal team has said it is absurd to claim the bank was seeking to hide its subprime exposure.
16) Societe Generale has been gradually recovering from the trading scandal, but it's been an up-and-down ride. It successfully raised capital not long after the Kerviel affair broke, but then was hit by the global financial crisis in late 2008.
17) It weathered the meltdown better than some, and paid back its state loans early. This year the bank has faced another challenge -- (EURO)3 billion in exposure to Greek government debt -- but reported (EURO)1.06 billion in profit for the first quarter and is forecasting a profitable year.
18) The trial is expected to last through late June. Questions abound, including how Kerviel managed to cover up his risky trading for so long. An internal report by the bank has said managers failed to follow up on 74 different alarms about Kerviel's activities and queries from derivatives exchange Eurex.
19) And why did Kerviel take such huge risks? He is not believed to have profited personally -- he never made more than (EURO)100,000 annually, including his bonus -- and insists he only wanted to earn money for Societe Generale.
20) In an interview last month with Le Journal du Dimanche, Kerviel said his mother instilled him with a dogged sense of dedication to your job, and he often helped out in her hair salon. Kerviel has reportedly received media training for his "I'm just an average guy" strategy.
21) Asked, "How are you living these days?" Kerviel responded: "Modestly, like a lot of people," adding that he has a small apartment, doesn't go on vacation and earns (EURO)2,300 a month at a computer services company outside Paris.
Accused French rogue trader Kerviel to stand trial
(APW_ENG_20100607.0660)
1) Jerome Kerviel says he's living the simple life these days. The former French trader accused of gambling away billions of his bank's money has a job in the suburbs making euro2,300 ($2,700) a month. He doesn't take vacations. His adrenaline-fueled life on the trading floor seems far away.
2) Two and a half years after the scandal broke, Kerviel goes on trial in Paris on Tuesday, accused by Societe Generale SA of risking tens of billions of euros of its money in trades that led to nearly euro5 billion (more than $7 billion) in losses once the bank unwound his positions in January 2008.
3) At the time it was considered history's biggest trading fraud, but it was soon dwarfed by a global financial crisis, the fall of Lehman Brothers and the Bernard L. Madoff multibillion-dollar Ponzi scheme.
4) Kerviel, the accused rogue trader, already has hammered out his defense in a book and interviews with French media, casting himself as an everyman who got carried away, a scapegoat for the bank, the victim of an out-of-control banking system.
5) It's a tactic that seems crafted to tap into popular discontent at a time of ongoing financial scandals and economic turmoil. His case destabilized the banking sector, already on the verge of the 2008 meltdown, and heightened pressure for better financial regulation, still high on today's agenda for governments worldwide.
6) Helping Kerviel's strategy is the 33-year-old's standing as an anti-hero in France. The son of a metalworker and a hairdresser, Kerviel grew up in the provinces and lacked the snooty education usually required for coveted trading jobs, yet he nonetheless managed to humiliate a banking powerhouse and expose the weakness of its controls.
7) A few bank executives resigned in the scandal's aftermath, including longtime Chairman Daniel Bouton. Kerviel's superiors were questioned in the probe, but none of them face charges.
8) Kerviel's dark-haired Gallic good looks also helped his mystique: T-shirts were sold proclaiming their wearers "Jerome Kerviel's girlfriend."
9) The former futures trader's defense contends his supervisors were aware of his risks but did not stop them as long as he was making money for Societe Generale. The bank denies that claim.
10) In Kerviel's book out last month, "L'Engrenage: Memoires d'un trader" ("The Spiral: Memoirs of a Trader"), he compared his former job to prostitution -- with his superiors eagerly counting his days' earnings -- and likened that milieu to a "great banking orgy."
11) Kerviel is charged with forgery, breach of trust and unauthorized computer use. He risks five years in prison as well as a fine of euro375,000 ($448,000) if convicted.
12) Societe Generale lawyer Jean Veil told the Sunday paper Le Journal du Dimanche that the bank would also ask for euro4.9 billion in damages, the amount lost in the scandal's aftermath, though he acknowledged that realistically Kerviel couldn't pay it. The massive sum earned Kerviel a nickname, "the 5-billion-euro man."
13) Among the defense arguments expected in court, Kerviel has argued that the bank was trying to deflect attention from subprime-related losses by making him a scapegoat.
14) Societe Generale secretly began unwinding some 50 billion euros ($78 billion) of Kerviel's positions on Jan. 21, 2008, when U.S. markets were closed because of Martin Luther King Day, putting massive pressure on futures markets and exacerbating its losses. That week was marked by turmoil in financial markets worldwide.
15) The bank revealed its actions three days later, when it also announced subprime-related writedowns and provisions of euro2.05 billion. Societe Generale's legal team has said it is absurd to claim the bank was seeking to hide its subprime exposure.
16) Societe Generale has been gradually recovering from the trading scandal, but it's been an up-and-down ride. It successfully raised capital not long after the Kerviel affair broke, but then was hit by the global financial crisis in late 2008.
17) It weathered the meltdown better than some, and paid back its state loans early. This year the bank has faced another challenge -- euro3 billion in exposure to Greek government debt -- but reported euro1.06 billion in profit for the first quarter and is forecasting a profitable year.
18) The trial is expected to last through late June. Questions abound, including how Kerviel managed to cover up his risky trading for so long. An internal report by the bank has said managers failed to follow up on 74 different alarms about Kerviel's activities and queries from derivatives exchange Eurex.
19) And why did Kerviel take such huge risks? He is not believed to have profited personally -- he never made more than euro100,000 annually, including his bonus -- and insists he only wanted to earn money for Societe Generale.
20) In an interview last month with Le Journal du Dimanche, Kerviel said his mother instilled him with a dogged sense of dedication to your job, and he often helped out in her hair salon. Kerviel has reportedly received media training for his "I'm just an average guy" strategy.
21) Asked, "How are you living these days?" Kerviel responded: "Modestly, like a lot of people," adding that he has a small apartment, doesn't go on vacation and earns euro2,300 a month at a computer services company outside Paris.
2010-06-09
French court probes trader Kerviel ' s risk-taking
(APW_ENG_20100609.0899)
1) Judges trying French futures trader Jerome Kerviel probed Wednesday how he could have overstepped his authority so completely as to wind up gambling tens of billions of euros (dollars) of Societe Generale's money.
2) When his trial opened Tuesday, Kerviel argued that he never hid what he was doing from his bosses, who sat close to him in the trading room. The scandal cost (EURO)5 billion (more than $7 billion at the time) in losses once the bank unwound Kerviel's positions in January 2008.
3) Kerviel's lawyers argue that his superiors tacitly encouraged his massive risk-taking as long as he made money. The bank denies that claim, insisting that Kerviel methodically concealed his tracks.
4) The 33-year-old trader is not accused profiting personally from his huge trades, and he insists he only wanted to make money for the bank.
5) Kerviel's defense team also paints him as a pawn of an out-of-control banking system that encouraged massive risk-taking in the pursuit of ever-greater profits -- a system that has since imploded. His case gave a taste of the much larger banking crises to come, from the fall of Lehman Brothers to Bernard L. Madoff's multibillion-dollar Ponzi scheme.
6) Societe Generale stunned the banking world when it accused Kerviel of massive fraud in 2008. It said Kerviel overstepped his authority and bet 50 billion euros ($73 billion) -- more than the bank's market value -- on futures in European equity markets. The risk limit for Kerviel's entire 8-member trading team was only (EURO)125 million.
7) Asked by the head judge if he was mandated to bet tens of billions, Kerviel responded "Probably not." Then he amended his response: "Certainly not."
8) Kerviel is accused of concealing his actions by balancing out his real trades with fictitious transactions. The bank spent days quietly unwinding his positions before it announced the scandal to the markets.
9) Kerviel said Societe Generale traders often overstepped their limits, adding, "we were never given a hard time" by managers.
10) The former chairman of the French stock market regulator, Jean-Francois Lepetit, testified Wednesday that traders did occasionally go over their limits but were obligated to inform their supervisors immediately.
11) "There is no justification for remaining silent," he said. "If you go over your limits and you don't say it, you are at fault."
12) Questions remain about how the bank missed so many warning signals about Kerviel. An internal report by the bank said managers failed to follow up on 74 different alarms about Kerviel's activities.
13) The former futures trader faces a possible five years in prison as well as a (EURO)375,000 ($450,000) fine if convicted on charges of forgery, breach of trust and unauthorized computer use.
14) The bank, a civil party, is also asking for nearly (EURO)5 billion in damages -- the amount lost in the scandal -- even though Kerviel could never pay that amount.
French court probes trader Kerviel ' s risk-taking
(APW_ENG_20100609.0903)
1) Judges trying French futures trader Jerome Kerviel probed Wednesday how he could have overstepped his authority so completely as to wind up gambling tens of billions of euros (dollars) of Societe Generale's money.
2) When his trial opened Tuesday, Kerviel argued that he never hid what he was doing from his bosses, who sat close to him in the trading room. The scandal cost euro5 billion (more than $7 billion at the time) in losses once the bank unwound Kerviel's positions in January 2008.
3) Kerviel's lawyers argue that his superiors tacitly encouraged his massive risk-taking as long as he made money. The bank denies that claim, insisting that Kerviel methodically concealed his tracks.
4) The 33-year-old trader is not accused profiting personally from his huge trades, and he insists he only wanted to make money for the bank.
5) Kerviel's defense team also paints him as a pawn of an out-of-control banking system that encouraged massive risk-taking in the pursuit of ever-greater profits -- a system that has since imploded. His case gave a taste of the much larger banking crises to come, from the fall of Lehman Brothers to Bernard L. Madoff's multibillion-dollar Ponzi scheme.
6) Societe Generale stunned the banking world when it accused Kerviel of massive fraud in 2008. It said Kerviel overstepped his authority and bet 50 billion euros ($73 billion) -- more than the bank's market value -- on futures in European equity markets. The risk limit for Kerviel's entire 8-member trading team was only euro125 million.
7) Asked by the head judge if he was mandated to bet tens of billions, Kerviel responded "Probably not." Then he amended his response: "Certainly not."
8) Kerviel is accused of concealing his actions by balancing out his real trades with fictitious transactions. The bank spent days quietly unwinding his positions before it announced the scandal to the markets.
9) Kerviel said Societe Generale traders often overstepped their limits, adding, "we were never given a hard time" by managers.
10) The former chairman of the French stock market regulator, Jean-Francois Lepetit, testified Wednesday that traders did occasionally go over their limits but were obligated to inform their supervisors immediately.
11) "There is no justification for remaining silent," he said. "If you go over your limits and you don't say it, you are at fault."
12) Questions remain about how the bank missed so many warning signals about Kerviel. An internal report by the bank said managers failed to follow up on 74 different alarms about Kerviel's activities.
13) The former futures trader faces a possible five years in prison as well as a euro375,000 ($450,000) fine if convicted on charges of forgery, breach of trust and unauthorized computer use.
14) The bank, a civil party, is also asking for nearly euro5 billion in damages -- the amount lost in the scandal -- even though Kerviel could never pay that amount.
Kerviel goes on offensive on trial ' s second day
(APW_ENG_20100609.1172)
1) The former trader accused of nearly toppling France's Societe Generale argued in court Wednesday that he didn't invent the tricks that allowed him to gamble tens of billions of euros (dollars) of the bank's money, insisting that such practices were tolerated by management.
2) Jerome Kerviel used his second day in court to try to turn the tables on his former employer, portraying himself as a pawn and casting his bank as an anything-goes place where he was encouraged to take massive risks until the scandal broke in January 2008. Societe Generale strongly denies his claims.
3) The 33-year-old former futures trader eventually bet (EURO)50 billion ($73 billion at the time), even more than the bank's market value.
4) One of Kerviel's former bosses, visibly riled by the defense strategy, called him a liar who has never apologized for putting the bank at risk.
5) "Jerome Kerviel is not Robin Hood," Jean-Pierre Mustier, the bank's former head of corporate and investment banking, testified. "Jerome Kerviel is the trader who lost the largest amount of money in the world."
6) Kerviel, the son of a hairdresser and a metalworker, has become an anti-hero in France for humiliating one of the country's most powerful financial institutions and revealing the weakness of its risk controls. Internationally, his case is fodder for those seeking greater regulations in the industry.
7) The scandal cost the bank (EURO)5 billion (more than $7 billion at the time) in losses once Societe Generale SA unwound Kerviel's positions in January 2008. It remains the largest-ever alleged fraud by a single trader, though it has since been dwarfed by other crises in the financial world, from the fall of Lehman Brothers to Bernard L. Madoff's multibillion-dollar Ponzi scheme.
8) On Wednesday, judges probed how Kerviel could have overstepped his authority so completely as to wind up betting tens of billions of euros (dollars), and how the bank failed to stop him sooner.
9) While accusing the bank of encouraging him, Kerviel -- relaxed and tieless -- nonetheless admitted mistakes of his own.
10) "I recognize that it was completely idiotic," he told the court, referring to his gambles in general.
11) When the head judge asked if he was mandated to bet such sums, Kerviel responded "Probably not." Then, somewhat sheepishly, he added: "Certainly not."
12) But Kerviel insisted that his superiors accepted his tricks -- such as covering up his huge positions with fictional trades that appeared to balance them out.
13) "I'm not the one who invented them, others did it too," he said, without naming names. He added, "These practices were known and recognized by management."
14) The bank strongly denies that Kerviel's bosses knew what he was doing.
15) "The hierarchy didn't know," said Mustier, Kerviel's former boss, who left the bank amid an unrelated insider trading probe. "The hierarchy is me ... Mr. Kerviel is lying, like he lied to me all the time."
16) Questions remain about how managers failed to follow up on 74 different alarms about Kerviel's activities -- bank official Claire Dumas said the warnings went unnoticed because they were sent to many different departments.
17) The accused rogue trader faces a possible five years in prison as well as a (EURO)375,000 ($450,000) fine if convicted on charges of forgery, breach of trust and unauthorized computer use.
18) The bank, a civil party, is also asking for nearly (EURO)5 billion in damages, though Kerviel could never pay that amount.
19) Kerviel is not accused profiting personally from his huge trades. His motive -- beyond the hope of a few hundred thousand euros (dollars) bonus -- remains the great mystery of the case. The ex-trader says he only wanted to make money for the bank.
20) Jean Veil, lawyer for Societe Generale, said Kerviel's explanations were "muddled."
21) "He keeps saying he did it as a gift to the bank," Veil said. "But the thing with gifts is that you eventually have to give them. He never did."
Kerviel goes on offensive on trial ' s second day
(APW_ENG_20100609.1174)
1) The former trader accused of nearly toppling France's Societe Generale argued in court Wednesday that he didn't invent the tricks that allowed him to gamble tens of billions of euros (dollars) of the bank's money, insisting that such practices were tolerated by management.
2) Jerome Kerviel used his second day in court to try to turn the tables on his former employer, portraying himself as a pawn and casting his bank as an anything-goes place where he was encouraged to take massive risks until the scandal broke in January 2008. Societe Generale strongly denies his claims.
3) The 33-year-old former futures trader eventually bet euro50 billion ($73 billion at the time), even more than the bank's market value.
4) One of Kerviel's former bosses, visibly riled by the defense strategy, called him a liar who has never apologized for putting the bank at risk.
5) "Jerome Kerviel is not Robin Hood," Jean-Pierre Mustier, the bank's former head of corporate and investment banking, testified. "Jerome Kerviel is the trader who lost the largest amount of money in the world."
6) Kerviel, the son of a hairdresser and a metalworker, has become an anti-hero in France for humiliating one of the country's most powerful financial institutions and revealing the weakness of its risk controls. Internationally, his case is fodder for those seeking greater regulations in the industry.
7) The scandal cost the bank euro5 billion (more than $7 billion at the time) in losses once Societe Generale SA unwound Kerviel's positions in January 2008. It remains the largest-ever alleged fraud by a single trader, though it has since been dwarfed by other crises in the financial world, from the fall of Lehman Brothers to Bernard L. Madoff's multibillion-dollar Ponzi scheme.
8) On Wednesday, judges probed how Kerviel could have overstepped his authority so completely as to wind up betting tens of billions of euros (dollars), and how the bank failed to stop him sooner.
9) While accusing the bank of encouraging him, Kerviel -- relaxed and tieless -- nonetheless admitted mistakes of his own.
10) "I recognize that it was completely idiotic," he told the court, referring to his gambles in general.
11) When the head judge asked if he was mandated to bet such sums, Kerviel responded "Probably not." Then, somewhat sheepishly, he added: "Certainly not."
12) But Kerviel insisted that his superiors accepted his tricks -- such as covering up his huge positions with fictional trades that appeared to balance them out.
13) "I'm not the one who invented them, others did it too," he said, without naming names. He added, "These practices were known and recognized by management."
14) The bank strongly denies that Kerviel's bosses knew what he was doing.
15) "The hierarchy didn't know," said Mustier, Kerviel's former boss, who left the bank amid an unrelated insider trading probe. "The hierarchy is me ... Mr. Kerviel is lying, like he lied to me all the time."
16) Questions remain about how managers failed to follow up on 74 different alarms about Kerviel's activities -- bank official Claire Dumas said the warnings went unnoticed because they were sent to many different departments.
17) The accused rogue trader faces a possible five years in prison as well as a euro375,000 ($450,000) fine if convicted on charges of forgery, breach of trust and unauthorized computer use.
18) The bank, a civil party, is also asking for nearly euro5 billion in damages, though Kerviel could never pay that amount.
19) Kerviel is not accused profiting personally from his huge trades. His motive -- beyond the hope of a few hundred thousand euros (dollars) bonus -- remains the great mystery of the case. The ex-trader says he only wanted to make money for the bank.
20) Jean Veil, lawyer for Societe Generale, said Kerviel's explanations were "muddled."
21) "He keeps saying he did it as a gift to the bank," Veil said. "But the thing with gifts is that you eventually have to give them. He never did."
2010-06-11
Witness: French bank had to know of trader ' s bets
(APW_ENG_20100611.0609)
1) A former supervisor of the Societe Generale futures trader whose high positions cost the bank billions has told a court it's unthinkable that bosses would not have been aware of Jerome Kerviel's over-the-top bets.
2) Benoit Tailleu, who at one time headed the Delta One desk -- but left the bank before the scandal -- said that Kerviel's direct bosses "could not totally ignore" his activities. "That is certain. It is obvious."
3) On Friday, the fourth day of his trial, Kerviel is still trying to show that the bank tolerated his risk-taking, which Societe Generale denies.
4) Kerviel bet up to (EURO)50 billion ($73 billion at the time), costing the bank nearly (EURO)5 billion once it unwound his positions in January 2008.
Witness: French bank had to know of trader ' s bets
(APW_ENG_20100611.0610)
1) A former supervisor of the Societe Generale futures trader whose high positions cost the bank billions has told a court it's unthinkable that bosses would not have been aware of Jerome Kerviel's over-the-top bets.
2) Benoit Tailleu, who at one time headed the Delta One desk -- but left the bank before the scandal -- said that Kerviel's direct bosses "could not totally ignore" his activities. "That is certain. It is obvious."
3) On Friday, the fourth day of his trial, Kerviel is still trying to show that the bank tolerated his risk-taking, which Societe Generale denies.
4) Kerviel bet up to euro50 billion ($73 billion at the time), costing the bank nearly euro5 billion once it unwound his positions in January 2008.
Witness: French bank had to know of trader ' s bets
(APW_ENG_20100611.0894)
1) A former supervisor of Jerome Kerviel, the Societe Generale futures trader whose high positions cost the bank billions, told a court Friday that bosses must have been aware of Kerviel's over-the-top bets.
2) Benoit Tailleu -- who at one time headed the trading desk where Kerviel worked but left the bank before the scandal -- said that Kerviel's direct bosses "could not totally ignore" his activities. "That is certain. It is obvious."
3) On the fourth day of his trial, Kerviel's lawyers were still trying to show that the bank tolerated his risk-taking, which Societe Generale has forcefully denied.
4) Kerviel bet up to (EURO)50 billion ($73 billion at the time), costing the bank nearly (EURO)5 billion once it unwound his positions in January 2008. It remains the largest-ever alleged fraud by a single trader, though it has since been dwarfed by other crises in the financial world, from the fall of Lehman Brothers to Bernard L. Madoff's multibillion-dollar Ponzi scheme.
5) The portfolio managed by Kerviel, now 33, did not carry great risks, Tailleu said. The type of positions Kerviel took "have nothing to do with (Kerviel's) portfolio."
6) "It's as if Jerome Kerviel had a mandate to buy 10 tons of strawberries but bought 100 tons of potatoes and the supervisor passes through the hangar every day and says nothing," Tailleu said.
7) Tailleu said Kerviel could not have been a solitary schemer.
8) "The scenario of the isolated trader pleases and, at the same time, is the less worrisome for (bank) chiefs, shareholders," he said.
9) Kerviel faces a possible five years in prison as well as a (EURO)375,000 ($450,000) fine if convicted of forgery, breach of trust and unauthorized computer use. The bank, a plaintiff in the case, is asking for nearly (EURO)5 billion in damages, though Kerviel could never pay that amount.
10) At his trial, on Thursday three witnesses failed to show up and there were two no-shows Friday.
Witness: French bank had to know of trader ' s bets
(APW_ENG_20100611.0906)
1) A former supervisor of Jerome Kerviel, the Societe Generale futures trader whose high positions cost the bank billions, told a court Friday that bosses must have been aware of Kerviel's over-the-top bets.
2) Benoit Tailleu -- who at one time headed the trading desk where Kerviel worked but left the bank before the scandal -- said that Kerviel's direct bosses "could not totally ignore" his activities. "That is certain. It is obvious."
3) On the fourth day of his trial, Kerviel's lawyers were still trying to show that the bank tolerated his risk-taking, which Societe Generale has forcefully denied.
4) Kerviel bet up to euro50 billion ($73 billion at the time), costing the bank nearly euro5 billion once it unwound his positions in January 2008. It remains the largest-ever alleged fraud by a single trader, though it has since been dwarfed by other crises in the financial world, from the fall of Lehman Brothers to Bernard L. Madoff's multibillion-dollar Ponzi scheme.
5) The portfolio managed by Kerviel, now 33, did not carry great risks, Tailleu said. The type of positions Kerviel took "have nothing to do with (Kerviel's) portfolio."
6) "It's as if Jerome Kerviel had a mandate to buy 10 tons of strawberries but bought 100 tons of potatoes and the supervisor passes through the hangar every day and says nothing," Tailleu said.
7) Tailleu said Kerviel could not have been a solitary schemer.
8) "The scenario of the isolated trader pleases and, at the same time, is the less worrisome for (bank) chiefs, shareholders," he said.
9) Kerviel faces a possible five years in prison as well as a euro375,000 ($450,000) fine if convicted of forgery, breach of trust and unauthorized computer use. The bank, a plaintiff in the case, is asking for nearly euro5 billion in damages, though Kerviel could never pay that amount.
10) At his trial, on Thursday three witnesses failed to show up and there were two no-shows Friday.
2010-06-15
SocGen CEO says Kerviel affair in the past
(APW_ENG_20100615.0267)
1) The head of Societe Generale says the massive trading loss that rocked the French bank in 2008 is in the past.
2) CEO Frederic Oudea, who was chief financial officer when SocGen announced a (EURO)5 billion ($6.12 billion) trading loss made unwinding the bets of former trader Jerome Kerviel, is unveiling a five-year plan to restore investor confidence.
3) The bank said Tuesday that it wants to continue reducing its risk profile with "a constant and reinforced vigilance."
4) Kerviel is currently on trial on a series of charges.
5) The Kerviel affair prompted widespread calls for tighter internal controls at banks, which Oudea said SocGen put in place at the time.
6) The global financial crisis has prompted more far-reaching reforms, Oudea said.
SocGen CEO says Kerviel affair in the past
(APW_ENG_20100615.0268)
1) The head of Societe Generale says the massive trading loss that rocked the French bank in 2008 is in the past.
2) CEO Frederic Oudea, who was chief financial officer when SocGen announced a euro5 billion ($6.12 billion) trading loss made unwinding the bets of former trader Jerome Kerviel, is unveiling a five-year plan to restore investor confidence.
3) The bank said Tuesday that it wants to continue reducing its risk profile with "a constant and reinforced vigilance."
4) Kerviel is currently on trial on a series of charges.
5) The Kerviel affair prompted widespread calls for tighter internal controls at banks, which Oudea said SocGen put in place at the time.
6) The global financial crisis has prompted more far-reaching reforms, Oudea said.
SocGen CEO says Kerviel affair in the past
(APW_ENG_20100615.0304)
1) The massive trading loss that rocked Societe Generale in 2008 is in the past, the French bank's chief executive said Tuesday, as he unveiled a five-year plan to restore investor confidence in the company.
2) CEO Frederic Oudea, who was chief financial officer when SocGen announced a (EURO)5 billion ($6.12 billion) loss on unwinding the bets of former trader Jerome Kerviel, wants the bank to continue reducing its risk profile with "a constant and reinforced vigilance."
3) Kerviel is currently on trial on a series of charges.
4) The trading scandal prompted widespread calls for tighter internal controls at banks, which Oudea said SocGen put in place at the time.
5) Meanwhile, the global financial crisis has prompted more far-reaching reforms, Oudea said.
6) "It's already for me in the past," he told journalists before an investor day in Paris.
7) "Since then many things have happened, things much more fundamental with the financial crisis."
8) Kerviel claims that the bank knew of and tolerated his risk-taking, which Societe Generale denies.
9) The trader bet up to (EURO)50 billion ($73 billion at the time). The loss made unwinding those positions remains the largest-ever alleged fraud by a single trader, though it has since been dwarfed by other crises in the financial world, from the fall of investment bank Lehman Brothers to Bernard L. Madoff's multibillion-dollar Ponzi scheme.
10) Oudea said his five-year plan involves restructuring SocGen's Russian business, adding customers in its home market of France, and cutting costs.
11) He announced a new earnings target for 2012 of (EURO)6 billion in net profit, double the aim for this year. That compares with the 2009 net profit of (EURO)678 million.
12) Kerviel faces a possible five years in prison as well as a (EURO)375,000 ($450,000) fine if convicted of forgery, breach of trust and unauthorized computer use. The bank, a civil party in the case, is asking for nearly (EURO)5 billion in damages, though Kerviel could never pay that amount.
SocGen CEO says Kerviel affair in the past
(APW_ENG_20100615.0305)
1) The massive trading loss that rocked Societe Generale in 2008 is in the past, the French bank's chief executive said Tuesday, as he unveiled a five-year plan to restore investor confidence in the company.
2) CEO Frederic Oudea, who was chief financial officer when SocGen announced a euro5 billion ($6.12 billion) loss on unwinding the bets of former trader Jerome Kerviel, wants the bank to continue reducing its risk profile with "a constant and reinforced vigilance."
3) Kerviel is currently on trial on a series of charges.
4) The trading scandal prompted widespread calls for tighter internal controls at banks, which Oudea said SocGen put in place at the time.
5) Meanwhile, the global financial crisis has prompted more far-reaching reforms, Oudea said.
6) "It's already for me in the past," he told journalists before an investor day in Paris.
7) "Since then many things have happened, things much more fundamental with the financial crisis."
8) Kerviel claims that the bank knew of and tolerated his risk-taking, which Societe Generale denies.
9) The trader bet up to euro50 billion ($73 billion at the time). The loss made unwinding those positions remains the largest-ever alleged fraud by a single trader, though it has since been dwarfed by other crises in the financial world, from the fall of investment bank Lehman Brothers to Bernard L. Madoff's multibillion-dollar Ponzi scheme.
10) Oudea said his five-year plan involves restructuring SocGen's Russian business, adding customers in its home market of France, and cutting costs.
11) He announced a new earnings target for 2012 of euro6 billion in net profit, double the aim for this year. That compares with the 2009 net profit of euro678 million.
12) Kerviel faces a possible five years in prison as well as a euro375,000 ($450,000) fine if convicted of forgery, breach of trust and unauthorized computer use. The bank, a civil party in the case, is asking for nearly euro5 billion in damages, though Kerviel could never pay that amount.
2010-06-24
French prosecutor seeks 4 years prison for Kerviel
(APW_ENG_20100624.0489)
1) A French prosecutor is seeking a sentence of four years in prison for former Societe Generale trader Jerome Kerviel, accused of one of history's biggest trading frauds.
2) Prosecutor Jean-Michel Aldebet called Kerviel "a manipulator, a trickster, a liar" in Thursday's trial proceedings.
3) He requested five years in prison, with one year suspended. The maximum possible sentence is five years for the charges Kerviel faced of forgery, breach of trust and unauthorized computer use.
4) Kerviel bet up to (EURO)50 billion ($73 billion at the time) of the bank's money, costing Societe Generale nearly (EURO)5 billion once it unwound his positions in January 2008.
5) Kerviel says the bank tolerated his massive risk-taking as long as he was making money, a claim the bank denies.
French prosecutor seeks 4 years prison for Kerviel
(APW_ENG_20100624.0491)
1) A French prosecutor is seeking a sentence of four years in prison for former Societe Generale trader Jerome Kerviel, accused of one of history's biggest trading frauds.
2) Prosecutor Jean-Michel Aldebet called Kerviel "a manipulator, a trickster, a liar" in Thursday's trial proceedings.
3) He requested five years in prison, with one year suspended. The maximum possible sentence is five years for the charges Kerviel faced of forgery, breach of trust and unauthorized computer use.
4) Kerviel bet up to euro50 billion ($73 billion at the time) of the bank's money, costing Societe Generale nearly euro5 billion once it unwound his positions in January 2008.
5) Kerviel says the bank tolerated his massive risk-taking as long as he was making money, a claim the bank denies.
2010-06-25
Kerviel ' s last day in French trading trial
(APW_ENG_20100625.0328)
1) Accused rogue trader Jerome Kerviel is keeping a low profile on the last day of his trial, where he's accused of unauthorized bets that cost French bank Societe Generale billions.
2) Prosecutor Jean-Michel Aldebet wants Kerviel to go prison for four years for one of history's biggest trading frauds, and calls Kerviel "a manipulator, a trickster, a liar."
3) Friday is Kerviel's last chance to argue his version of events to the court. He says his superiors were aware of and tolerated his risky trades as long as he was making money for the bank.
4) The bank denies this.
5) Kerviel and his lawyer entered the court by a side door for Friday's proceedings, and did not speak to reporters.
Kerviel ' s last day in French trading trial
(APW_ENG_20100625.0811)
1) Lawyers for accused rogue trader Jerome Kerviel contended Friday that Societe Generale had the means to track soaring bets that cost the French banking giant billions -- and stop him.
2) On the final day of Kerviel's trial, the defense turned on its head the prosecutor's accusation that the 33-year-old trader was a "manipulator, a trickster, a liar."
3) Defense lawyer Olivier Metzner said in closing arguments Friday that Kerviel was "trained, fabricated" by Societe Generale, the bank's creature "in a virtual world where numbers no longer have any value."
4) The soft-spoken Kerviel has maintained throughout the trial that the bank tolerated his massive risk-taking as long as he was making money, a claim the bank denies.
5) Kerviel had bet up to (EURO)50 billion ($73 billion at the time) of the bank's money, costing Societe Generale nearly (EURO)5 billion once it unwound his positions in January 2008 -- one of history's biggest trading frauds.
6) Kerviel is charged with forgery, breach of trust and unauthorized computer use. He risks a maximum 5 years in prison with no possibility of early release and a (EURO)375,000 fine.
7) The prosecutor asked the court to convict Kerviel and sentence him to four years in prison and a one-year suspended sentence.
8) The verdict is expected Oct. 5.
9) Since the start of the trial, the court has tried to peel away what the prosecution claims is Kerviel's facade and understand why he gambled sums of money that went beyond what the bank authorized.
10) During the 3-hour-long defense plea, Kerviel's lawyers, assisted by computers, tried to show that the bank was able to track the trader's actions as he bet on exotic derivatives.
11) A question that has haunted the trial was put forth on the first day of the proceedings by presiding Judge Dominique Pauthe: "Who are you, Monsieur Kerviel?"
12) Defense attorney Nicolas Huc-Morel retorted on the final day: "There is no Kerviel mystery but a Societe Generale mystery," the mystery of what guided the bank.
13) For the leading defense attorney, Olivier Metzner, Kerviel never put the bank in danger, because the bank put itself in danger with its risky products and negligent oversight. Kerviel did not embezzle money, but simply went beyond the limits "of the immaterial," Metzner said. "He committed a grave professional error, not a penal infraction."
14) The bank says Kerviel made bets of up to (EURO)50 billion -- more than the bank's market capitalization -- on futures contracts on three European equity indices, though his net position appeared unremarkable because he balanced his real trades with fictitious transactions.
15) Still, an internal report by the bank has said managers failed to follow up on 74 different alarms about Kerviel's activities.
Kerviel ' s last day in French trading trial
(APW_ENG_20100625.0813)
1) Lawyers for accused rogue trader Jerome Kerviel contended Friday that Societe Generale had the means to track soaring bets that cost the French banking giant billions -- and stop him.
2) On the final day of Kerviel's trial, the defense turned on its head the prosecutor's accusation that the 33-year-old trader was a "manipulator, a trickster, a liar."
3) Defense lawyer Olivier Metzner said in closing arguments Friday that Kerviel was "trained, fabricated" by Societe Generale, the bank's creature "in a virtual world where numbers no longer have any value."
4) The soft-spoken Kerviel has maintained throughout the trial that the bank tolerated his massive risk-taking as long as he was making money, a claim the bank denies.
5) Kerviel had bet up to euro50 billion ($73 billion at the time) of the bank's money, costing Societe Generale nearly euro5 billion once it unwound his positions in January 2008 -- one of history's biggest trading frauds.
6) Kerviel is charged with forgery, breach of trust and unauthorized computer use. He risks a maximum 5 years in prison with no possibility of early release and a euro375,000 fine.
7) The prosecutor asked the court to convict Kerviel and sentence him to four years in prison and a one-year suspended sentence.
8) The verdict is expected Oct. 5.
9) Since the start of the trial, the court has tried to peel away what the prosecution claims is Kerviel's facade and understand why he gambled sums of money that went beyond what the bank authorized.
10) During the 3-hour-long defense plea, Kerviel's lawyers, assisted by computers, tried to show that the bank was able to track the trader's actions as he bet on exotic derivatives.
11) A question that has haunted the trial was put forth on the first day of the proceedings by presiding Judge Dominique Pauthe: "Who are you, Monsieur Kerviel?"
12) Defense attorney Nicolas Huc-Morel retorted on the final day: "There is no Kerviel mystery but a Societe Generale mystery," the mystery of what guided the bank.
13) For the leading defense attorney, Olivier Metzner, Kerviel never put the bank in danger, because the bank put itself in danger with its risky products and negligent oversight. Kerviel did not embezzle money, but simply went beyond the limits "of the immaterial," Metzner said. "He committed a grave professional error, not a penal infraction."
14) The bank says Kerviel made bets of up to euro50 billion -- more than the bank's market capitalization -- on futures contracts on three European equity indices, though his net position appeared unremarkable because he balanced his real trades with fictitious transactions.
15) Still, an internal report by the bank has said managers failed to follow up on 74 different alarms about Kerviel's activities.
2010-10-05
Verdict due in trial of Societe Generale trader
(APW_ENG_20101005.0016)
1) A Paris court will hand down a verdict Tuesday in the case of the former French trader accused of masterminding one of history's biggest trading frauds and costing one of France's largest banks billions in losses.
2) Jerome Kerviel, the 33-year-old former index futures trader at Societe Generale SA, risks five years in prison and a (EURO)375,000 ($513,000) fine on charges related to the claim that he covered up bets worth nearly (EURO)50 billion, or more than the bank was worth, between late 2007 and early 2008.
3) The soft-spoken Kerviel maintained throughout the two-week trial in June that the bank tolerated his massive risk-taking as long as he was making money, a claim the bank denies.
4) Societe Generale lost nearly (EURO)5 billion after it unwound Kerviel's positions in January 2008.
5) Presiding judge Dominique Pauthe tried several times during the trial to peel away what the prosecution claims is Kerviel's facade and understand why he gambled sums of money that went way beyond what the bank authorized.
6) "Who are you?" Pauthe asked Kerviel during the trial.
7) "I'm someone who tried to do my work as well as I could, to make money for the bank. I didn't mean to cause any harm," Kerviel answered.
8) Kerviel is charged with forgery, breach of trust and unauthorized computer use.
9) Employed by Societe General since 2000, Kerviel worked his way up from a supporting role in an office that monitors trades to a job on the futures desk where he invested the bank's money by hedging on European equity market indices.
10) He was arrested in January 2008 and held for six weeks in Paris' notorious La Sante prison. Since being fired from Societe Generale, Kerviel has worked as a computer consultant.
11) The bank says Kerviel made bets of up to (EURO)50 billion -- more than the bank's market capitalization -- on futures contracts on three European equity indices, though his net position appeared unremarkable because he balanced his real trades with fictitious transactions. The bank says his actions cost it (EURO)4.9 billion.
12) Still, an internal report by the bank found managers failed to follow up on 74 different alarms about Kerviel's activities.
Ex-Societe Generale trader found guilty
(APW_ENG_20101005.0205)
1) A Paris court has found former trader Jerome Kerviel guilty of all charges in one of history's biggest trading frauds, which cost one of France's largest banks billions of euros.
2) The court did not immediately indicate a sentence for the 33-year-old former index futures trader at Societe Generale SA. He was facing up to five years prison and a (EURO)375,000 ($513,000) fine.
3) Kerviel was found guilty Tuesday on charges of forgery, breach of trust and unauthorized computer use for covering up bets worth nearly (EURO)50 billion between late 2007 and early 2008.
4) He maintained throughout the trial in June that the bank tolerated his massive risk-taking as long as it made money.
French trader gets 3 years in jail, must pay $6.7B
(APW_ENG_20101005.0223)
1) A Paris court has convicted former trader Jerome Kerviel guilty of all charges in one of history's biggest trading frauds, sentencing him to three years in prison and ordering him to repay Societe Generale SA the staggering (EURO)4.9 billion ($6.72 billion) that the bank lost.
2) The 33-year-old former index futures trader stood expressionless as the court pronounced a five-year sentence on Tuesday -- with two years suspended.
3) Kerviel was found guilty on charges of forgery, breach of trust and unauthorized computer use for covering up bets worth nearly (EURO)50 billion between late 2007 and early 2008.
4) He maintained throughout the trial in June that the bank tolerated his massive risk-taking as long as it made money.
French trader appealing sentence, $6.7B in damages
(APW_ENG_20101005.0242)
1) The lawyer for former French bank trader Jerome Kerviel says he is appealing a Paris court's verdict sending Kerviel to prison for three years and ordering him to pay a staggering (EURO)4.9 billion ($6.7 billion) in damages.
2) Lawyer Olivier Metzner says his client is "disgusted." He said the court found bank Societe Generale SA "was responsible for nothing, not responsible for the creature that it had created."
3) Metzner says "I have the feeling Jerome Kerviel is paying for an entire system."
4) Kerviel was found guilty on charges of forgery, breach of trust and unauthorized computer use for covering up bets worth nearly (EURO)50 billion between late 2007 and early 2008.
5) He maintained that the bank tolerated his massive risk-taking as long as it made money.
Ex-Societe Generale trader must pay $6.7 billion
(APW_ENG_20101005.0261)
1) A Paris court ordered former Societe Generale SA trader Jerome Kerviel on Tuesday to pay the bank a mind-numbing (EURO)4.9 billion ($6.7 billion) for his role in one of history's biggest trading frauds and sentenced him to three years in prison.
2) The ruling marked a huge victory for Societe Generale, one of France's most blue-blooded banks, which has worked to clean up its image and put in place tougher risk controls since the scandal broke in 2008.
3) The 33-year-old former futures index trader stood expressionless as the court convicted him of all charges and pronounced a five-year sentence with two years suspended.
4) Kerviel was found guilty on charges of forgery, breach of trust and unauthorized computer use for covering up bets worth nearly (EURO)50 billion between late 2007 and early 2008.
5) In a stunning blow, the court also ordered Kerviel to pay the bank back the (EURO)4.9 billion that it lost unwinding his complex positions in January 2008 -- a punishment he would almost certainly be unable to pay. While trading for the bank, he took home a salary and bonus of less than (EURO)100,000, or about $155,700 -- a relatively modest sum in the financial world.
6) Outside the courtroom, defense lawyer Olivier Metzner said Kerviel would appeal. Kerviel will remain free pending the appeal.
7) "He is disgusted," Metzner said of Kerviel's feeling about the ruling, adding that the court had judged that the bank "was responsible for nothing, not responsible for the creature that it had created."
8) Kerviel, a soft-spoken and debonair man from western Brittany, has garnered considerable public appeal in France for his image of being a scapegoat for powerful corporate interests. Kerviel maintained that the bank and his bosses tolerated his massive risk-taking as long as it made money, which he did at first.
9) "I have the feeling Jerome Kerviel is paying for an entire system," said Metzner, saying his client hadn't benefited financially from the fraud.
10) "I hope you all will donate a euro to Jerome Kerviel," the lawyer told TV cameras and reporters.
11) During the proceedings, both sides admitted to mistakes but Kerviel insisted his bank superiors knew what he was doing. Societe Generale's former chairman acknowledged there were problems in monitoring the trader's work.
12) The bank says Kerviel made bets of up to (EURO)50 billion -- more than the bank's total market value -- on futures contracts on three European equity indices, though his net position appeared unremarkable because he balanced his real trades with fictitious transactions. The bank says his actions cost it (EURO)4.9 billion.
13) Still, an internal report by the bank found managers failed to follow up on 74 different alarms about Kerviel's activities.
14) Employed by Societe Generale since 2000, Kerviel worked his way up from a supporting role in an office that monitors trades to a job on the futures desk where he invested the bank's money by hedging on European equity market indices.
15) He was arrested in January 2008 and held for six weeks in Paris' notorious La Sante prison. Since being fired from Societe Generale, Kerviel has worked as a computer consultant.
16) Societe Generale's shares rose slightly after the announce of the verdict, trading up 1 percent at (EURO)41.20 ($56.46)
Ex-French trader must pay $6.7 billion for fraud
(APW_ENG_20101005.0342)
1) Former Societe Generale SA trader Jerome Kerviel was convicted on all counts Tuesday in one of history's biggest trading frauds, sentenced to three years in jail and ordered to pay the bank a mind-numbing (EURO)4.9 billion ($6.7 billion) in damages.
2) The ruling marked a huge victory for Societe Generale, one of France's most blue-blooded banks, which has worked to clean up its image and put in place tougher risk controls since the scandal broke in 2008.
3) The 33-year-old former futures index trader stood expressionless as the court convicted him of all charges and pronounced a five-year sentence with two years suspended. Kerviel was found guilty on charges of forgery, breach of trust and unauthorized computer use for covering up bets worth nearly (EURO)50 billion between late 2007 and early 2008.
4) In a stunning blow, the court also ordered Kerviel to pay the bank back the (EURO)4.9 billion that it lost unwinding his complex positions in January 2008 -- a punishment he would almost certainly be unable to pay.
5) There were audible gasps and surprised looks when presiding judge Dominique Pauthe read out the damages to a packed courtroom of 150 reporters, court officials and members of the public.
6) Outside the courtroom, defense lawyer Olivier Metzner called the financial penalty "unbelievable."
7) "I have the feeling Jerome Kerviel is paying for an entire system," said Metzner, noting that his client hadn't benefited financially from the fraud.
8) Metzner said Kerviel would appeal and will remain free pending that appeal.
9) The damages are also suspended pending any appeal, so Kerviel wouldn't be ordered to pay right away. It wasn't immediately clear how he could do so, or whether the bank really expects to see that money back. French media calculated that based on his current salary of (EURO)2,300 ($3,150) a month as a computer consultant, it would take him 177,536 years to pay off the damages.
10) While trading for the bank, Kerviel took home a salary and bonus of less than (EURO)100,000, or about $155,700 -- a relatively modest sum in the financial world.
11) Kerviel sat with his arms folded and his legs crossed during the first 45 minutes of the hour-long hearing, sitting alone in the front row of the courtroom with seven empty wooden chairs to his left. He barely blinked as each guilty verdict was read out. He stood for sentencing in a dark suit and tie, frowning and silent.
12) "He is disgusted," Metzner said of Kerviel's feeling about the ruling, adding that the court had judged the bank "was responsible for nothing, not responsible for the creature that it had created."
13) "I hope you all will donate a euro to Jerome Kerviel," the lawyer told TV cameras and reporters,
14) Kerviel, a soft-spoken and debonair man from western Brittany, has garnered considerable public appeal in France for his image of being a scapegoat for powerful corporate interests. Kerviel maintained that the bank and his bosses tolerated his massive risk-taking as long as it made money, which he did at first, racking up (EURO)1.4 billion in profits for Societe Generale in 2007, the judge noted.
15) During the proceedings, both sides admitted to mistakes but Kerviel insisted his bank superiors knew what he was doing. Societe Generale's former chairman acknowledged there were problems in monitoring the trader's work.
16) The bank says Kerviel made bets of up to (EURO)50 billion -- more than the bank's total market value -- on futures contracts on three European equity indices, though his net position appeared unremarkable because he balanced his real trades with fictitious transactions. The bank says his actions cost it (EURO)4.9 billion.
17) Still, an internal report by the bank found managers failed to follow up on 74 different alarms about Kerviel's activities.
18) Employed by Societe Generale since 2000, Kerviel worked his way up from a supporting role in an office that monitors trades to a job on the futures desk where he invested the bank's money by hedging on European equity market indices.
19) He was arrested in January 2008 and held for six weeks in Paris' notorious La Sante prison. Societe Generale's shares rose slightly after the announcement of the verdict, trading up 1 percent at (EURO)41.20 ($56.46)
Ex-French trader must pay $6.7 billion for fraud
(APW_ENG_20101005.0463)
1) Former Societe Generale SA trader Jerome Kerviel was convicted on all counts Tuesday in one of history's biggest trading frauds, sentenced to three years in jail and ordered to pay the bank a mind-numbing (EURO)4.9 billion ($6.7 billion) in damages.
2) The ruling marked a huge victory for Societe Generale, one of France's most blue-blooded banks, which has worked to clean up its image and put in place tougher risk controls since the scandal broke in 2008.
3) The 33-year-old former futures index trader stood expressionless as the court convicted him of all charges and pronounced a five-year sentence with two years suspended. Kerviel was found guilty on charges of forgery, breach of trust and unauthorized computer use for covering up bets worth nearly (EURO)50 billion between late 2007 and early 2008.
4) In a stunning blow, the court also ordered Kerviel to pay the bank back the (EURO)4.9 billion that it lost unwinding his complex positions in January 2008 -- a punishment he would almost certainly be unable to pay. That sum marked the largest-ever alleged fraud by a single trader.
5) There were audible gasps and surprised looks when presiding judge Dominique Pauthe read out the damages to a packed courtroom of 150 reporters, court officials and members of the public.
6) Outside the courtroom, defense lawyer Olivier Metzner called the financial penalty "unbelievable."
7) "I have the feeling Jerome Kerviel is paying for an entire system," said Metzner, noting that his client hadn't benefited financially from the fraud.
8) Metzner said Kerviel would appeal and will remain free pending that appeal.
9) The damages are also suspended pending any appeal, so Kerviel wouldn't be ordered to pay right away.
10) French media calculated that based on his current salary of (EURO)2,300 ($3,150) a month as a computer consultant, it would take Kerviel 177,536 years to pay off the damages.
11) While trading for the bank, Kerviel took home a salary and bonus of less than (EURO)100,000, or about $155,700 -- a relatively modest sum in the financial world.
12) Societe Generale spokeswoman Caroline Guillaumin called the verdict "an important ruling that acknowledges the moral and financial harm done to the bank and its staff."
13) "The bank can now turn the page, pursue its strategy and continue to rebound," Guillaumin said in an emailed statement.
14) Kerviel sat with his arms folded and his legs crossed during the first 45 minutes of the hour-long hearing, sitting alone in the front row of the courtroom with seven empty wooden chairs to his left. He barely blinked as each guilty verdict was read out. He stood for sentencing in a dark suit and tie, frowning and silent.
15) "He is disgusted," Metzner said of Kerviel's feeling about the ruling, adding that the court had judged the bank "was responsible for nothing, not responsible for the creature that it had created."
16) "I hope you all will donate a euro to Jerome Kerviel," the lawyer told TV cameras and reporters.
17) Kerviel, a soft-spoken and debonair man from western Brittany, has garnered considerable public appeal in France for his image of being a scapegoat for powerful corporate interests. Kerviel maintained that the bank and his bosses tolerated his massive risk-taking as long as it made money, which he did at first, racking up (EURO)1.4 billion in profits for Societe Generale in 2007, the judge noted.
18) During the proceedings, both sides admitted to mistakes but Kerviel insisted his bank superiors knew what he was doing. Societe Generale's former chairman acknowledged there were problems in monitoring the trader's work.
19) The bank says Kerviel made bets of up to (EURO)50 billion -- more than the bank's total market value -- on futures contracts on three European equity indices, though his net position appeared unremarkable because he balanced his real trades with fictitious transactions.
20) In the ruling, the court said Kerviel acted without the bank's knowledge and said it was "obvious" none of his bosses would have allowed him to bet sums exceeding the bank's capital.
21) "Through his deliberate actions, he endangered the solvency of a bank that employed 140,000 people including himself, and whose future was seriously put at risk," the ruling said. The court also praised the bank's handling of the crisis, saying Kerviel's "actions without a doubt threatened the public order of the world economy" though their "impact was contained in the end by the bank's reactivity."
22) Still, an internal report by the bank found managers failed to follow up on 74 different alarms about Kerviel's activities.
23) The bank's CEO Daniel Bouton and its head of investment banking Jean-Pierre Mustier stepped down in the wake of the scandal, with Bouton saying attacks on him risked hurting the bank.
24) The bank's earnings crumpled in 2007 after taking into account the losses on Kerviel's trades. Its profit rebounded in 2008 but were cut by more than half last year when the bank was hit by billions in new losses stemming from bad bets prior to the financial crisis. So far this year the bank's earnings have bounced back thanks to strong retail banking in its home market.
25) Employed by Societe Generale since 2000, Kerviel worked his way up from a supporting role in an office that monitors trades to a job on the futures desk where he invested the bank's money by hedging on European equity market indices.
26) He was arrested in January 2008 and held for six weeks in Paris' notorious La Sante prison.
27) Societe Generale's shares rose slightly after the announcement of the verdict, trading up 1 percent at (EURO)41.20 ($56.46).
28) Kerviel's fraud eclipsed that of previous lone "rogue traders."
29) In one infamous case, Nick Leeson, a British trader working in Singapore for Barings Bank, made unauthorized futures trades that lost more than $1 billion and led to the venerable bank's collapse in 1995. That case prompted banks worldwide to tighten internal checks.
30) Leeson was released from a Singapore jail in 1998 for good behavior after serving 3 1/2 years of a 6 1/2-year sentence. He claimed he did not make a cent from his disastrous trades.
31) Leeson's agent said Tuesday he was willing to do one exclusive interview on the Kerviel verdict -- in exchange for a fee.
Ex-French trader must pay $6.7 billion for fraud
(APW_ENG_20101005.0596)
1) Ex-trader Jerome Kerviel was convicted on all counts Tuesday in history's biggest rogue trading scandal, sentenced to three years in jail and ordered to pay his former employer a mind-numbing (EURO)4.9 billion ($6.7 billion) in damages.
2) The ruling marked a huge victory for Societe Generale SA, one of France's most blue-blooded banks, which has worked to clean up its image and put in place tougher risk controls since the scandal broke in 2008.
3) The 33-year-old former futures index trader stood expressionless as the court convicted him and pronounced a five-year sentence with two years suspended. Kerviel was found guilty on charges of forgery, breach of trust and unauthorized computer use for covering up bets worth nearly (EURO)50 billion between late 2007 and early 2008.
4) In the most stunning blow, the court ordered Kerviel to pay the bank back the (EURO)4.9 billion that it lost unwinding his complex positions in January 2008 -- a punishment he would almost certainly be unable to pay. He was also banned for life from working in the financial industry.
5) There were gasps and surprised looks when presiding judge Dominique Pauthe read out the damages to a packed courtroom.
6) Outside the courtroom, defense lawyer Olivier Metzner called the financial penalty "unbelievable."
7) "I have the feeling Jerome Kerviel is paying for an entire system," said Metzner, noting that his client hadn't benefited financially from the fraud.
8) Metzner said Kerviel would appeal and will remain free pending that appeal. The damages are also suspended during the appeals process.
9) French media calculated that -- based on his current salary of (EURO)2,300 ($3,150) a month as a computer consultant -- it would take Kerviel 177,536 years to pay off the damages.
10) Paris lawyer Emmanuelle Kneuse, who works on white-collar crime cases, said the damages were the largest she could recall in France, a sum that obviously Kerviel could never pay in full.
11) But if the prison sentence and the huge damages are maintained on appeal, that would likely force Kerviel to promise substantial monthly payments to secure his release on parole, she said.
12) While trading for the bank, Kerviel took home a salary and bonus of less than (EURO)100,000, or about $155,700 -- a relatively modest sum in the financial world.
13) Societe Generale spokeswoman Caroline Guillaumin called the verdict "an important ruling that acknowledges the moral and financial harm done to the bank and its staff."
14) "The bank can now turn the page, pursue its strategy and continue to rebound," Guillaumin said in an e-mailed statement.
15) Kerviel sat with his arms folded and his legs crossed during the first 45 minutes of the hour-long hearing, alone in the front row of the courtroom. He barely blinked as each guilty verdict was read out. He then stood for sentencing in a dark suit and tie, frowning and silent.
16) "He is disgusted," Metzner said of Kerviel's reaction to the ruling, adding the court had judged the bank "was responsible for nothing, not responsible for the creature that it had created."
17) "I hope you all will donate a euro to Jerome Kerviel," the lawyer told TV cameras and reporters.
18) Kerviel, a soft-spoken and debonair man from western Brittany, has garnered considerable public appeal in France for his image of being a scapegoat for powerful corporate interests. Kerviel maintained that the bank and his bosses tolerated his massive risk-taking as long as it made money, which he did at first, racking up (EURO)1.4 billion in profits for Societe Generale in 2007, the judge noted.
19) In the end, the bank's loss of (EURO)4.9 billion stands as the largest-ever alleged fraud by a single trader, though the case has since been overshadowed by other crises in the financial world, from the fall of Lehman Brothers to Bernard L. Madoff's multibillion-dollar Ponzi scheme.
20) During the proceedings, both sides admitted to mistakes but Kerviel insisted his bank superiors knew what he was doing. Societe Generale's former chairman acknowledged there were problems in monitoring the trader's work, and an internal report by the bank found managers failed to follow up on 74 different alarms about Kerviel's activities.
21) The bank says Kerviel made bets of up to (EURO)50 billion -- more than the bank's total market value -- on futures contracts on three European equity indices, and that he masked the size of his bets by recording fictitious offsetting transactions.
22) In the ruling, the court said Kerviel acted without the bank's knowledge and said it was "obvious" none of his bosses would have allowed him to bet sums exceeding the bank's capital.
23) "Through his deliberate actions, he endangered the solvency of a bank that employed 140,000 people including himself, and whose future was seriously put at risk," the ruling said.
24) The court also praised the bank's handling of the crisis, saying Kerviel's "actions without a doubt threatened the public order of the world economy" though their "impact was contained in the end by the bank's reactivity."
25) No
26) The bank's CEO Daniel Bouton and its head of investment banking Jean-Pierre Mustier stepped down in the wake of the scandal, with Bouton saying attacks on him risked hurting the bank.
27) The bank's earnings crumpled in 2007 after taking into account the losses on Kerviel's trades. Its profit rebounded in 2008 but were cut by more than half last year when the bank was hit by billions in new losses stemming from bad bets prior to the financial crisis. This year the bank's earnings have bounced back, thanks to strong retail banking in its home market.
28) Employed by Societe Generale since 2000, Kerviel worked his way up from a supporting role in an office that monitors trades to a job on the futures desk where he invested the bank's money by hedging on European equity market indices.
29) He was arrested in January 2008 and held for six weeks in Paris' La Sante prison.
30) Societe Generale's shares rose after the announcement of the verdict, trading up 3 percent at (EURO)42.05 ($57.94).
31) Kerviel's fraud eclipsed that of previous lone traders.
32) In one infamous case, Nick Leeson, a British trader working in Singapore for Barings Bank, made unauthorized futures trades that lost more than $1 billion and led to the venerable bank's collapse in 1995. That case prompted banks worldwide to tighten their internal checks.
33) Leeson was released from a Singapore jail in 1998 for good behavior after serving 3 1/2 years of a 6 1/2-year sentence. He claimed he did not make a cent from his disastrous trades but is still subject to an injunction from the liquidators of Barings that seeks the return of 100 million pounds on any of his earnings that relate to Barings.
34) In 2008, Leeson said he'd paid back less than 500,000 pounds. He used the profits from the book "Rogue Trader" to pay off his seven-figure legal bill.
35) Leeson's agent said Tuesday the former trader was willing to do an exclusive interview on the Kerviel verdict -- in exchange for a fee.
Ex-French trader must pay $6.7 billion for fraud
(APW_ENG_20101005.0635)
1) Ex-trader Jerome Kerviel was convicted on all counts Tuesday in history's biggest rogue trading scandal, sentenced to three years in jail and ordered to pay his former employer a mind-numbing (EURO)4.9 billion ($6.7 billion) in damages.
2) The ruling marked a huge victory for Societe Generale SA, one of France's most blue-blooded banks, which has worked to clean up its image and put in place tougher risk controls since the scandal broke in 2008.
3) The 33-year-old former futures index trader stood expressionless as the court convicted him and pronounced a five-year sentence with two years suspended. Kerviel was found guilty on charges of forgery, breach of trust and unauthorized computer use for covering up bets worth nearly (EURO)50 billion between late 2007 and early 2008.
4) In the most stunning blow, the court ordered Kerviel to pay the bank back the (EURO)4.9 billion that it lost unwinding his complex positions in January 2008 -- a punishment he would almost certainly be unable to pay. He was also banned for life from working in the financial industry.
5) There were gasps and surprised looks when presiding judge Dominique Pauthe read out the damages to a packed courtroom.
6) Outside the courtroom, defense lawyer Olivier Metzner called the financial penalty "unbelievable."
7) "I have the feeling Jerome Kerviel is paying for an entire system," said Metzner, noting that his client hadn't benefited financially from the fraud.
8) Metzner said Kerviel would appeal and will remain free pending that appeal. The damages are also suspended during the appeals process.
9) French media calculated that -- based on his current salary of (EURO)2,300 ($3,150) a month as a computer consultant -- it would take Kerviel 177,536 years to pay off the damages.
10) Paris lawyer Emmanuelle Kneuse, who works on white-collar crime cases, said the damages were the largest she could recall in France, a sum that obviously Kerviel could never pay in full.
11) But if the prison sentence and the huge damages are maintained on appeal, that would likely force Kerviel to promise substantial monthly payments to secure his release on parole, she said.
12) While trading for the bank, Kerviel took home a salary and bonus of less than (EURO)100,000, or about $155,700 -- a relatively modest sum in the financial world.
13) Societe Generale spokeswoman Caroline Guillaumin called the verdict "an important ruling that acknowledges the moral and financial harm done to the bank and its staff."
14) "The bank can now turn the page, pursue its strategy and continue to rebound," Guillaumin said in an e-mailed statement.
15) Kerviel sat with his arms folded and his legs crossed during the first 45 minutes of the hour-long hearing, alone in the front row of the courtroom. He barely blinked as each guilty verdict was read out. He then stood for sentencing in a dark suit and tie, frowning and silent.
16) "He is disgusted," Metzner said of Kerviel's reaction to the ruling, adding the court had judged the bank "was responsible for nothing, not responsible for the creature that it had created."
17) "I hope you all will donate a euro to Jerome Kerviel," the lawyer told TV cameras and reporters.
18) Kerviel, a soft-spoken and debonair man from western Brittany, has garnered considerable public appeal in France for his image of being a scapegoat for powerful corporate interests. Kerviel maintained that the bank and his bosses tolerated his massive risk-taking as long as it made money, which he did at first, racking up (EURO)1.4 billion in profits for Societe Generale in 2007, the judge noted.
19) In the end, the bank's loss of (EURO)4.9 billion stands as the largest-ever alleged fraud by a single trader, though the case has since been overshadowed by other crises in the financial world, from the fall of Lehman Brothers to Bernard L. Madoff's multibillion-dollar Ponzi scheme.
20) During the proceedings, both sides admitted to mistakes but Kerviel insisted his bank superiors knew what he was doing. Societe Generale's former chairman acknowledged there were problems in monitoring the trader's work, and an internal report by the bank found managers failed to follow up on 74 different alarms about Kerviel's activities.
21) The bank says Kerviel made bets of up to (EURO)50 billion -- more than the bank's total market value -- on futures contracts on three European equity indices, and that he masked the size of his bets by recording fictitious offsetting transactions.
22) In the ruling, the court said Kerviel acted without the bank's knowledge and said it was "obvious" none of his bosses would have allowed him to bet sums exceeding the bank's capital.
23) "Through his deliberate actions, he endangered the solvency of a bank that employed 140,000 people including himself, and whose future was seriously put at risk," the ruling said.
24) The court also praised the bank's handling of the crisis, saying Kerviel's "actions without a doubt threatened the public order of the world economy" though their "impact was contained in the end by the bank's reactivity."
25) No one else faces charges in the case. The bank's CEO Daniel Bouton and its head of investment banking Jean-Pierre Mustier stepped down in the wake of the scandal, with Bouton saying attacks on him risked hurting the bank.
26) The bank's earnings crumpled in 2007 after taking into account the losses on Kerviel's trades. Its profit rebounded in 2008 but were cut by more than half last year when the bank was hit by billions in new losses stemming from bad bets prior to the financial crisis. This year the bank's earnings have bounced back, thanks to strong retail banking in its home market.
27) Employed by Societe Generale since 2000, Kerviel worked his way up from a supporting role in an office that monitors trades to a job on the futures desk where he invested the bank's money by hedging on European equity market indices.
28) He was arrested in January 2008 and held for six weeks in Paris' La Sante prison.
29) Societe Generale's shares rose after the announcement of the verdict, trading up 3 percent at (EURO)42.05 ($57.94).
30) Kerviel's fraud eclipsed that of previous lone traders.
31) In one infamous case, Nick Leeson, a British trader working in Singapore for Barings Bank, made unauthorized futures trades that lost more than $1 billion and led to the venerable bank's collapse in 1995. That case prompted banks worldwide to tighten their internal checks.
32) Leeson was released from a Singapore jail in 1998 for good behavior after serving 3 1/2 years of a 6 1/2-year sentence. He claimed he did not make a cent from his disastrous trades but is still subject to an injunction from the liquidators of Barings that seeks the return of 100 million pounds on any of his earnings that relate to Barings.
33) In 2008, Leeson said he'd paid back less than 500,000 pounds. He used the profits from the book "Rogue Trader" to pay off his seven-figure legal bill.
34) Leeson's agent said Tuesday the former trader was willing to do an exclusive interview on the Kerviel verdict -- in exchange for a fee.
Ex-French trader must pay $6.7 billion for fraud
(APW_ENG_20101005.0727)
1) Ex-trader Jerome Kerviel was convicted on all counts Tuesday in history's biggest rogue trading scandal, sentenced to three years in prison and ordered to pay his former employer damages of (EURO)4.9 billion ($6.7 billion) -- a sum so staggering it drew gasps in the courtroom.
2) The court rejected defense arguments that the 33-year-old trader was a scapegoat for a financial system gone haywire with greed and the pursuit of profit at any cost -- a decision sure to take some pressure off the beleaguered banking system overall.
3) By ordering a tough sentence for a lone trader, the ruling marked a startling departure from the general atmosphere of hostility and suspicion about big banks in an era of financial turmoil. It was a huge victory for Kerviel's former employer Societe Generale SA, France's second-biggest bank, which long had a reputation for cutting-edge financial engineering and has put in place tougher risk controls since the scandal broke in 2008.
4) Kerviel maintained that the bank and his bosses tolerated his massive risk-taking as long as it made money.
5) "I have the feeling Jerome Kerviel is paying for an entire system," said Olivier Metzner, Kerviel's lawyer, noting that his client hadn't benefited financially from the fraud.
6) Kerviel stood expressionless as the court convicted him and pronounced a five-year sentence with two years suspended. Kerviel was found guilty on charges of forgery, breach of trust and unauthorized computer use for covering up bets worth nearly (EURO)50 billion between late 2007 and early 2008. He was also banned for life from working in the financial industry.
7) In the most stunning blow, the court ordered Kerviel to pay the bank back the (EURO)4.9 billion that it lost unwinding his complex positions in January 2008 -- a punishment nobody realistically expects him to repay.
8) It's the equivalent of 20 Airbus A380 superjumbo jets, or the entire gross domestic product of the West African nation of Benin.
9) French media calculated that -- based on his current salary of (EURO)2,300 ($3,150) a month as a computer consultant -- it would take Kerviel 177,536 years to pay off the damages.
10) The sentence "is more symbolic than real" said Bradley Simon, a white collar criminal defense attorney, "because he will never be able to pay even a tiny fraction" of the amount.
11) Simon, a New York-based former federal prosecutor turned white-collar criminal defense attorney, said the decision was "breathtaking."
12) "One low-level individual must bear the total responsibility for the near-demise of a pillar of the French financial system," Simon said. "This judgment ignores what we now know to be the real case, that Societe Generale and financial institutions throughout the world were encouraging risky trades."
13) Kerviel's lawyer said he would appeal and will remain free pending that appeal. The damages are also suspended during the appeals process.
14) Paris lawyer Emmanuelle Kneuse, who works on white-collar crime cases, said the damages were the largest she could recall in France.
15) If the prison sentence and huge damages are maintained on appeal, that would likely force Kerviel to promise substantial monthly payments to secure his release on parole, she said.
16) Societe Generale spokeswoman Caroline Guillaumin called the verdict "an important ruling that acknowledges the moral and financial harm done to the bank and its staff."
17) "The bank can now turn the page, pursue its strategy and continue to rebound," Guillaumin said in an e-mailed statement.
18) Kerviel sat with his arms folded and his legs crossed during the first 45 minutes of the hour-long hearing, alone in the front row of the courtroom. He barely blinked as each guilty verdict was read out. He then stood for sentencing in a dark suit and tie, frowning and silent.
19) "He is disgusted," Metzner said of Kerviel's reaction, adding the court had judged the bank "was responsible for nothing, not responsible for the creature that it had created."
20) "I hope you all will donate a euro to Jerome Kerviel," the lawyer told TV cameras and reporters.
21) Kerviel, a soft-spoken and debonair man from western Brittany, has garnered considerable public appeal in France for his image of being a scapegoat for powerful corporate interests.
22) While trading for the bank, Kerviel took home a salary and bonus of less than (EURO)100,000, or about $155,700 -- a relatively modest sum in the financial world.
23) In 2007, Kerviel amassed (EURO)1.4 billion in profits for Societe Generale, the presiding judge noted.
24) But in the end, the bank's loss of (EURO)4.9 billion stands as the largest-ever alleged fraud by a single trader, though the case has since been overshadowed by other financial world crises, from the fall of Lehman Brothers to Bernard L. Madoff's multibillion-dollar Ponzi scheme.
25) During the proceedings, both sides admitted to mistakes but Kerviel insisted his bank superiors knew what he was doing. Societe Generale's former chairman acknowledged there were problems in monitoring the trader's work, and an internal report by the bank found managers failed to follow up on 74 different alarms about Kerviel's activities.
26) The bank says Kerviel made bets of up to (EURO)50 billion -- more than the bank's total market value -- on futures contracts on three European equity indices, and that he masked the size of his bets by recording fictitious offsetting transactions.
27) In the ruling, the court said Kerviel acted without the bank's knowledge and said it was "obvious" none of his bosses would have allowed him to bet sums exceeding the bank's capital.
28) "Through his deliberate actions, he endangered the solvency of a bank that employed 140,000 people including himself, and whose future was seriously put at risk," the ruling said.
29) No one else faced charges in the case. The bank's CEO Daniel Bouton and its head of investment banking Jean-Pierre Mustier stepped down in the wake of the scandal, with Bouton saying attacks on him risked hurting the bank.
30) The bank's earnings crumpled in 2007 after taking into account the losses on Kerviel's trades. Its profit rebounded in 2008 but were cut by more than half last year when the bank was hit by billions in new losses stemming from bad bets prior to the financial crisis. This year the bank's earnings have bounced back, thanks to strong retail banking in its home market.
31) Employed by Societe Generale since 2000, Kerviel worked his way up from a supporting role in an office that monitors trades to a job on the futures desk where he invested the bank's money by hedging on European equity market indices.
32) He was arrested in January 2008 and held for six weeks in Paris' La Sante prison.
33) Societe Generale's shares rose after the announcement of the verdict, closing up 3.6 percent at (EURO)42.33 (US$58.33).
34) Kerviel's fraud eclipsed that of previous lone traders.
35) In one infamous case, Nick Leeson, a British trader working in Singapore for Barings Bank, made unauthorized futures trades that lost more than $1 billion and led to the venerable bank's collapse in 1995. That case prompted banks worldwide to tighten their internal checks.
36) Leeson was released from a Singapore jail in 1998 for good behavior after serving 3 1/2 years of a 6 1/2-year sentence. He claimed he did not make a cent from his disastrous trades but is still subject to an injunction from Barings' liquidators that seeks the return of 100 million pounds on any of his earnings relating to Barings.
37) Leeson's agent said Tuesday the former trader was willing to do an exclusive interview on the Kerviel verdict -- in exchange for a fee.
Ex-French trader must pay $6.7 billion for fraud
(APW_ENG_20101005.0742)
1) Ex-trader Jerome Kerviel was convicted on all counts Tuesday in history's biggest rogue trading scandal, sentenced to at least three years in prison and ordered to pay his former employer damages of (EURO)4.9 billion ($6.7 billion) -- a sum so staggering it drew gasps in the courtroom.
2) The court rejected defense arguments that the 33-year-old trader was a scapegoat for a financial system gone haywire with greed and the pursuit of profit at any cost -- a decision sure to take some pressure off the beleaguered banking system overall.
3) By ordering a tough sentence for a lone trader, the ruling marked a startling departure from the general atmosphere of hostility and suspicion about big banks in an era of financial turmoil. It was a huge victory for Kerviel's former employer Societe Generale SA, France's second-biggest bank, which long had a reputation for cutting-edge financial engineering and has put in place tougher risk controls since the scandal broke in 2008.
4) Kerviel maintained that the bank and his bosses tolerated his massive risk-taking as long as it made money -- a claim the bank strongly denied.
5) "I have the feeling Jerome Kerviel is paying for an entire system," said Olivier Metzner, Kerviel's lawyer, noting that his client hadn't benefited financially from the fraud.
6) Kerviel stood expressionless as the court convicted him and pronounced a five-year sentence with two years suspended. Kerviel was found guilty on charges of forgery, breach of trust and unauthorized computer use for covering up bets worth nearly (EURO)50 billion between late 2007 and early 2008. He was also banned for life from working in the financial industry.
7) In the most stunning blow, the court ordered Kerviel to pay the bank back the (EURO)4.9 billion that it lost unwinding his complex positions in January 2008 -- a punishment nobody realistically expects him to repay.
8) It's the equivalent of 20 Airbus A380 superjumbo jets, or the entire gross domestic product of the west African nation of Benin.
9) French media calculated that -- based on his current salary of (EURO)2,300 ($3,150) a month as a computer consultant -- it would take Kerviel 177,536 years to pay off the damages.
10) The sentence "is more symbolic than real" said Bradley Simon, a white collar criminal defense attorney, "because he will never be able to pay even a tiny fraction" of the amount.
11) Simon, a New York-based former federal prosecutor turned white-collar criminal defense attorney, said the decision was "breathtaking."
12) "One low-level individual must bear the total responsibility for the near-demise of a pillar of the French financial system," Simon said. "This judgment ignores what we now know to be the real case, that Societe Generale and financial institutions throughout the world were encouraging risky trades."
13) Kerviel's lawyer said he would appeal and will remain free pending that appeal. The damages are also suspended during the appeals process.
14) Paris lawyer Emmanuelle Kneuse, who works on white-collar crime cases, said the damages were the largest she could recall in France.
15) If the prison sentence and huge damages are maintained on appeal, that would likely force Kerviel to promise substantial monthly payments to secure his release on parole, she said.
16) Societe Generale spokeswoman Caroline Guillaumin called the verdict "an important ruling that acknowledges the moral and financial harm done to the bank and its staff."
17) "The bank can now turn the page, pursue its strategy and continue to rebound," Guillaumin said in an e-mailed statement.
18) Kerviel sat with his arms folded and his legs crossed during the first 45 minutes of the hour-long hearing, alone in the front row of the courtroom. He barely blinked as each guilty verdict was read out. He then stood for sentencing in a dark suit and tie, frowning and silent.
19) "He is disgusted," Metzner said of Kerviel's reaction, adding the court had judged the bank "was responsible for nothing, not responsible for the creature that it had created."
20) "I hope you all will donate a euro to Jerome Kerviel," the lawyer told TV cameras and reporters.
21) Kerviel, a soft-spoken and debonair man from western Brittany, has garnered considerable public appeal in France for his image of being a scapegoat for powerful corporate interests.
22) While trading for the bank, Kerviel took home a salary and bonus of less than (EURO)100,000, or about $155,700 -- a relatively modest sum in the financial world.
23) In 2007, Kerviel amassed (EURO)1.4 billion in profits for Societe Generale, the presiding judge noted.
24) But in the end, the bank's loss of (EURO)4.9 billion stands as the largest-ever alleged fraud by a single trader, though the case has since been overshadowed by other financial world crises, from the fall of Lehman Brothers to Bernard L. Madoff's multibillion-dollar Ponzi scheme.
25) During the proceedings, both sides admitted to mistakes. Kerviel insisted his bank superiors knew what he was doing, which the bank denied. Societe Generale's former chairman acknowledged there were problems in monitoring the trader's work, and an internal report by the bank found managers failed to follow up on 74 different alarms about Kerviel's activities.
26) The bank says Kerviel made bets of up to (EURO)50 billion -- more than the bank's total market value -- on futures contracts on three European equity indices, and that he masked the size of his bets by recording fictitious offsetting transactions.
27) In the ruling, the court said Kerviel acted without the bank's knowledge and said it was "obvious" none of his bosses would have allowed him to bet sums exceeding the bank's capital.
28) "Through his deliberate actions, he endangered the solvency of a bank that employed 140,000 people including himself, and whose future was seriously put at risk," the ruling said.
29) No one else faced charges in the case. The bank's CEO Daniel Bouton and its head of investment banking Jean-Pierre Mustier stepped down in the wake of the scandal, with Bouton saying attacks on him risked hurting the bank.
30) The bank's earnings crumpled in 2007 after taking into account the losses on Kerviel's trades. Its profit rebounded in 2008 but were cut by more than half last year when the bank was hit by billions in new losses stemming from bad bets prior to the financial crisis. This year the bank's earnings have bounced back, thanks to strong retail banking in its home market.
31) Employed by Societe Generale since 2000, Kerviel worked his way up from a supporting role in an office that monitors trades to a job on the futures desk where he invested the bank's money by hedging on European equity market indices.
32) He was arrested in January 2008 and held for six weeks in Paris' La Sante prison.
33) Societe Generale's shares rose after the announcement of the verdict, closing up 3.6 percent at (EURO)42.33 (US$58.33).
34) Kerviel's fraud eclipsed that of previous lone traders.
35) In one infamous case, Nick Leeson, a British trader working in Singapore for Barings Bank, made unauthorized futures trades that lost more than $1 billion and led to the venerable bank's collapse in 1995. That case prompted banks worldwide to tighten their internal checks.
36) Leeson was released from a Singapore jail in 1998 for good behavior after serving 3 1/2 years of a 6 1/2-year sentence. He claimed he did not make a cent from his disastrous trades but is still subject to an injunction from Barings' liquidators that seeks the return of 100 million pounds on any of his earnings relating to Barings.
37) Leeson's agent said Tuesday the former trader was willing to do an exclusive interview on the Kerviel verdict -- in exchange for a fee.
2010-10-06
Ex-French trader must pay $6.7 billion for fraud
(APW_ENG_20101006.0007)
1) Ex-trader Jerome Kerviel was convicted on all counts in history's biggest rogue trading scandal, sentenced to at least three years in prison and ordered to pay his former employer damages of (EURO)4.9 billion ($6.7 billion) -- a sum so staggering it drew gasps in the courtroom.
2) The court rejected defense arguments that the 33-year-old trader was a scapegoat for a financial system gone haywire with greed and the pursuit of profit at any cost -- a decision sure to take some pressure off the beleaguered banking system overall.
3) By ordering a tough sentence for a lone trader, Tuesday's ruling marked a startling departure from the general atmosphere of hostility and suspicion about big banks in an era of financial turmoil. It was a huge victory for Kerviel's former employer Societe Generale SA, France's second-biggest bank, which long had a reputation for cutting-edge financial engineering and has put in place tougher risk controls since the scandal broke in 2008.
4) Kerviel maintained that the bank and his bosses tolerated his massive risk-taking as long as it made money -- a claim the bank strongly denied.
5) "I have the feeling Jerome Kerviel is paying for an entire system," said Olivier Metzner, Kerviel's lawyer, noting that his client hadn't benefited financially from the fraud.
6) Kerviel stood expressionless as the court convicted him and pronounced a five-year sentence with two years suspended. Kerviel was found guilty on charges of forgery, breach of trust and unauthorized computer use for covering up bets worth nearly (EURO)50 billion between late 2007 and early 2008. He was also banned for life from working in the financial industry.
7) In the most stunning blow, the court ordered Kerviel to pay the bank back the (EURO)4.9 billion that it lost unwinding his complex positions in January 2008 -- a punishment nobody realistically expects him to repay.
8) It's the equivalent of 20 Airbus A380 superjumbo jets, or the entire gross domestic product of the west African nation of Benin.
9) French media calculated that -- based on his current salary of (EURO)2,300 ($3,150) a month as a computer consultant -- it would take Kerviel 177,536 years to pay off the damages.
10) The sentence "is more symbolic than real" said Bradley Simon, a white collar criminal defense attorney, "because he will never be able to pay even a tiny fraction" of the amount.
11) Simon, a New York-based former federal prosecutor turned white-collar criminal defense attorney, said the decision was "breathtaking."
12) "One low-level individual must bear the total responsibility for the near-demise of a pillar of the French financial system," Simon said. "This judgment ignores what we now know to be the real case, that Societe Generale and financial institutions throughout the world were encouraging risky trades."
13) Kerviel's lawyer said he would appeal and will remain free pending that appeal. The damages are also suspended during the appeals process.
14) Paris lawyer Emmanuelle Kneuse, who works on white-collar crime cases, said the damages were the largest she could recall in France.
15) If the prison sentence and huge damages are maintained on appeal, that would likely force Kerviel to promise substantial monthly payments to secure his release on parole, she said.
16) Societe Generale spokeswoman Caroline Guillaumin called the verdict "an important ruling that acknowledges the moral and financial harm done to the bank and its staff."
17) "The bank can now turn the page, pursue its strategy and continue to rebound," Guillaumin said in an e-mailed statement.
18) Kerviel sat with his arms folded and his legs crossed during the first 45 minutes of the hour-long hearing, alone in the front row of the courtroom. He barely blinked as each guilty verdict was read out. He then stood for sentencing in a dark suit and tie, frowning and silent.
19) "He is disgusted," Metzner said of Kerviel's reaction, adding the court had judged the bank "was responsible for nothing, not responsible for the creature that it had created."
20) "I hope you all will donate a euro to Jerome Kerviel," the lawyer told TV cameras and reporters.
21) Kerviel, a soft-spoken and debonair man from western Brittany, has garnered considerable public appeal in France for his image of being a scapegoat for powerful corporate interests.
22) While trading for the bank, Kerviel took home a salary and bonus of less than (EURO)100,000, or about $155,700 -- a relatively modest sum in the financial world.
23) In 2007, Kerviel amassed (EURO)1.4 billion in profits for Societe Generale, the presiding judge noted.
24) But in the end, the bank's loss of (EURO)4.9 billion stands as the largest-ever alleged fraud by a single trader, though the case has since been overshadowed by other financial world crises, from the fall of Lehman Brothers to Bernard L. Madoff's multibillion-dollar Ponzi scheme.
25) During the proceedings, both sides admitted to mistakes. Kerviel insisted his bank superiors knew what he was doing, which the bank denied. Societe Generale's former chairman acknowledged there were problems in monitoring the trader's work, and an internal report by the bank found managers failed to follow up on 74 different alarms about Kerviel's activities.
26) The bank says Kerviel made bets of up to (EURO)50 billion -- more than the bank's total market value -- on futures contracts on three European equity indices, and that he masked the size of his bets by recording fictitious offsetting transactions.
27) In the ruling, the court said Kerviel acted without the bank's knowledge and said it was "obvious" none of his bosses would have allowed him to bet sums exceeding the bank's capital.
28) "Through his deliberate actions, he endangered the solvency of a bank that employed 140,000 people including himself, and whose future was seriously put at risk," the ruling said.
29) No one else faced charges in the case. The bank's CEO Daniel Bouton and its head of investment banking Jean-Pierre Mustier stepped down in the wake of the scandal, with Bouton saying attacks on him risked hurting the bank.
30) The bank's earnings crumpled in 2007 after taking into account the losses on Kerviel's trades. Its profit rebounded in 2008 but were cut by more than half last year when the bank was hit by billions in new losses stemming from bad bets prior to the financial crisis. This year the bank's earnings have bounced back, thanks to strong retail banking in its home market.
31) Employed by Societe Generale since 2000, Kerviel worked his way up from a supporting role in an office that monitors trades to a job on the futures desk where he invested the bank's money by hedging on European equity market indices.
32) He was arrested in January 2008 and held for six weeks in Paris' La Sante prison.
33) Societe Generale's shares rose after the announcement of the verdict, closing up 3.6 percent at (EURO)42.33 (US$58.33).
34) Kerviel's fraud eclipsed that of previous lone traders.
35) In one infamous case, Nick Leeson, a British trader working in Singapore for Barings Bank, made unauthorized futures trades that lost more than $1 billion and led to the venerable bank's collapse in 1995. That case prompted banks worldwide to tighten their internal checks.
36) Leeson was released from a Singapore jail in 1998 for good behavior after serving 3 1/2 years of a 6 1/2-year sentence. He claimed he did not make a cent from his disastrous trades but is still subject to an injunction from Barings' liquidators that seeks the return of 100 million pounds on any of his earnings relating to Barings.
37) Leeson's agent said Tuesday the former trader was willing to do an exclusive interview on the Kerviel verdict -- in exchange for a fee.
Kerviel says he ' s shocked by court sentence
(APW_ENG_20101006.0169)
1) Ex-trader Jerome Kerviel compares his tough sentencing in history's biggest rogue trading scandal to "getting hit on the head with a club."
2) Kerviel says in a radio interview he is a scapegoat for his former employer, Societe Generale bank. He says the Paris court "wanted me to pay for everybody" because the bank "had to be saved."
3) The 33-year-old was convicted on all charges, sentenced to three years in prison and ordered to pay his former employer damages of (EURO)4.9 billion ($6.7 billion). Kerviel says he is "crushed" by the weight of the sentencing.
4) Kerviel says he is making about (EURO)900 ($1,245) a month working part-time as a computer consultant. He gave his first interview since the verdict to Europe-1 radio on Wednesday.
Kerviel says he ' s crushed by French court sentence
(APW_ENG_20101006.0206)
1) Ex-trader Jerome Kerviel, speaking for the first time Wednesday about his tough sentencing in history's biggest rogue trading scandal, insisted he is a scapegoat for his former bank and compared the penalty to getting "hit on the head with a club."
2) The 33-year-old was convicted Tuesday, sentenced to three years in prison and ordered to pay his former employer damages of (EURO)4.9 billion ($6.7 billion) -- the equivalent of 20 Airbus A380 superjumbo jets.
3) "I'm starting to digest it, but I'm nonetheless crushed by the weight of the sanction and the weight of responsibility the ruling places on me," Kerviel told Europe-1 radio.
4) Kerviel maintained in court that the bank and his bosses tolerated his massive risk-taking as long as it made money -- a claim the bank strongly denied, saying he took great pains to cover up his actions.
5) "I have the feeling they wanted to make me pay for everybody and that Societe Generale had to be saved," he said.
6) Of the verdict, he said: "It's difficult, obviously, when you get hit on the head with a club that way."
7) Kerviel is appealing the ruling and says he hopes in the new trial "to prove once and for all that I wasn't the only one in the boat."
8) The bank says Kerviel made bets of up to (EURO)50 billion -- more than the bank's total market value -- on futures contracts on three European equity indices, and that he masked the size of his bets by recording fictitious offsetting transactions.
9) The (EURO)4.9 billion figure is the sum the bank says it lost unwinding Kerviel's complex positions in January 2008. It's a sum nobody realistically expects him to repay.
10) Kerviel said he is currently making about (EURO)900 ($1,245) a month working part-time as a computer consultant -- he reduced his hours to concentrate on the trial.
Kerviel says he ' s crushed by French court sentence
(APW_ENG_20101006.0271)
1) Ex-trader Jerome Kerviel, speaking for the first time Wednesday about his tough sentencing in history's biggest rogue trading scandal, insisted he is a scapegoat for his former bank and compared the penalty to getting "hit on the head with a club."
2) The 33-year-old was convicted Tuesday, sentenced to three years in prison and ordered to pay his former employer damages of (EURO)4.9 billion ($6.7 billion) -- the equivalent of 20 Airbus A380 superjumbo jets.
3) "I'm starting to digest it, but I'm nonetheless crushed by the weight of the sanction and the weight of responsibility the ruling places on me," Kerviel told Europe-1 radio.
4) At the same time, some observers began calling for the bank to let Kerviel off the hook for the (EURO)4.9 billion the court ruled he owed it.
5) Government spokesman Luc Chatel told French radio RMC that this was a "gesture" the bank might consider.
6) "I responded very clearly that it wasn't up to the government, it was Societe Generale's decision to eventually make a gesture, but it wasn't our responsibility," Chatel told reporters after the government's weekly Cabinet meeting.
7) Kerviel maintained in court that the bank and his bosses tolerated his massive risk-taking as long as it made money -- a claim the bank strongly denied, saying he took great pains to cover up his actions.
8) "I have the feeling they wanted to make me pay for everybody and that Societe Generale had to be saved," he said.
9) Of the verdict, he said: "It's difficult, obviously, when you get hit on the head with a club that way."
10) Kerviel is appealing the ruling and says he hopes in the new trial "to prove once and for all that I wasn't the only one in the boat."
11) The bank says Kerviel made bets of up to (EURO)50 billion -- more than the bank's total market value -- on futures contracts on three European equity indices, and that he masked the size of his bets by recording fictitious offsetting transactions.
12) The (EURO)4.9 billion figure is the sum the bank says it lost unwinding Kerviel's complex positions in January 2008. It's a sum nobody realistically expects him to repay.
13) Kerviel said he is currently making about (EURO)900 ($1,245) a month working part-time as a computer consultant -- he reduced his hours to concentrate on the trial.
Kerviel says he ' s crushed by French court sentence
(APW_ENG_20101006.0782)
1) Ex-trader Jerome Kerviel, speaking for the first time Wednesday about his tough sentencing in history's biggest rogue trading scandal, insisted he is a scapegoat for his former bank and compared the penalty to getting "hit on the head with a club."
2) The 33-year-old was convicted Tuesday, sentenced to three years in prison and ordered to pay Societe Generale, his former employer, damages of (EURO)4.9 billion ($6.7 billion) -- the equivalent of 20 Airbus A380 superjumbo jets.
3) "I'm starting to digest it, but I'm nonetheless crushed by the weight of the sanction and the weight of responsibility the ruling places on me," Kerviel told Europe-1 radio.
4) As some observers began calling for the bank to forgive Kerviel's astronomical debt, Societe Generale said it doesn't expect to get all its money back.
5) "There's no question of asking one man to pay such a sum," bank spokeswoman Caroline Guillaumin told French radio station France Info.
6) She said the bank was "open to finding a solution that's in the interests of our shareholders and employees, and that takes into account Jerome Kerviel's situation."
7) Earlier in the day, government spokesman Luc Chatel told French radio RMC that this was a "gesture" the bank might consider.
8) "I responded very clearly that it wasn't up to the government, it was Societe Generale's decision to eventually make a gesture, but it wasn't our responsibility," Chatel told reporters after the government's weekly Cabinet meeting.
9) Kerviel maintained in court that the bank and his bosses tolerated his massive risk-taking as long as it made money -- a claim the bank strongly denied, saying he took great pains to cover up his actions.
10) "I have the feeling they wanted to make me pay for everybody and that Societe Generale had to be saved," he said.
11) Of the verdict, he said: "It's difficult, obviously, when you get hit on the head with a club that way."
12) Kerviel is appealing the ruling and says he hopes in the new trial "to prove once and for all that I wasn't the only one in the boat."
13) The bank says Kerviel made bets of up to (EURO)50 billion -- more than the bank's total market value -- on futures contracts on three European equity indices, and that he masked the size of his bets by recording fictitious offsetting transactions.
14) The (EURO)4.9 billion figure is the sum that the bank says it lost unwinding Kerviel's complex positions in January 2008. It's a sum nobody realistically expects him to repay. He would not have to pay anything until the legal process runs its course.
15) Kerviel said he is currently making about (EURO)900 ($1,245) a month working part-time as a computer consultant -- he reduced his hours to concentrate on the trial.