Société Générale is the second largest bank in France, behind BNP Paribas, and one of the 10 biggest euro zone banks. Better known as SocGen, its reputation was dented after news that a rogue trader, Jerome Kerviel, had lost it more than the equivalent of US$7 billion. Kerviel was subsequently sentenced to three years in jail, and the bank won a 4.9 billion euro judgement against Kerviel.
Ex-trader Kerviel rebuffed by Paris employment tribunal
Reuters in Paris
A Paris employment tribunal has rejected former Societe Generale trader Jerome Kerviel’s plea for a new expert inquiry to help overturn his dismissal in France’s biggest-ever trading scandal in 2008.
In a separate criminal case, Kerviel is running out of options to escape conviction and a jail sentence upheld by an appeals court in October over 4.9 billion euros (HK$49.3 billion) in losses that French bank SocGen said were the result of unauthorised trades by Kerviel.
The 36-year-old ex-trader, who was ordered to repay the huge sum in its entirety, has never denied masking the 50 billion euros (HK$502.8 billion) in market positions that went wrong as the financial crisis unfolded in early 2008. He has, however, always said his bosses knew what he was doing, an accusation SocGen denies.
Kerviel has asked the employment tribunal to overturn his dismissal and grant him 4.9 billion euros in damages but no new inquiry will now be opened.
Speaking to supporters and media outside the courthouse after the hour-long hearing, an unshaven and tieless Kerviel said he was disappointed but would keep fighting ahead of a final ruling by the employment tribunal, which could take months.
“I am disappointed, of course ... They’ve refused (my demands),” he said. “We will keep going.”
Far-left groups and the popular press in France have painted Kerviel as a naive victim of big finance, despite his role before the case as a highly-paid trader. Dozens of supporters chanted slogans against SocGen and threw fake banknotes like confetti outside the court, also brewing coffee and serving croissants to the crowd.
SocGen’s legal team issued a short statement saying Kerviel had been late in submitting several demands and that after a “lengthy debate” the employment tribunal had rejected them.
“Despite the media presence orchestrated by Jerome Kerviel, the legal system showed once again that it could remain clear-headed,” it said.
Without a new inquiry, it is unlikely there will be any new elements brought to light that might help Kerviel’s case, either before the employment tribunal or in the criminal proceeding.
The former banker still has a chance of winning on some points, however, thanks to the technicalities of French employment law, argued Mabrouk Sassi, a lawyer who specialises in tax, business and employment law.
Under the terms of his dismissal, SocGen said he had wilfully sought to hurt the company, which may be successfully rejected, Sassi said. But even a victory for Kerviel in this case would only represent around 800,000 euros (HK$8.0 million), barely a dent in the 4.9 billion due. He may also still face time in jail.
“The paradox is that SocGen could lose on the dismissal but win the criminal case,” said Sassi.
Kerviel was flanked by his lawyer, David Koubbi, and far-left political firebrand Jean-Luc Melenchon, who compared the former trader to Alfred Dreyfus, a Jewish military officer and victim of anti-Semitism who was wrongfully charged with treason in the 19th century.
“This is a case of one individual against the financial world,” Melenchon told reporters. “It is emblematic of the kind of world we are living in.”
One of Kerviel’s supporters, 60-year-old former secretary Sylvana Fauvet, said she viewed the ex-trader as a victim.
“I came to support (Kerviel)...They’ve already condemned him to death by making him repay the 4.9 billion,” she said. “It’s the bosses who are always responsible for what happens at a company, including when there are losses.”