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SocGen Rogue Trader Gets Three Years; $7bn Fine

Global Glimpses | October 6, 2010

A French court has sentenced Societe General rogue trader Jérôme Kerviel to three years in prison and ordered him to pay €4.9bn ($6.75bn) in damages for unauthorized risk taking that almost broke the bank in 2008.

“By his deliberate actions, he put in peril the existence of the bank that employed 140,000 people, of which he was a part, and whose future was threatened,” ruled Judge Dominique Pauthe.

Kerviel has always maintained that his bosses gave tacit approval to his risk-taking. He had admitted a charge of computer abuse but denied abuse of trust and forgery.

The symbolic fine, which Kerviel could never be expected to pay, is equal to the losses the bank racked up when it unwound his €50bn of uncovered trades on financial futures.

The French banking commission fined SocGen €4m - a record - in 2008 for “serious failings” in its internal controls. The bank says it invested €130m in...

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