Kerviel Appeal Over Conviction Should Fail, SocGen Tells Judges
Societe Generale SA (GLE) wants a Paris appeals court to uphold a 2010 conviction holding Jerome Kerviel responsible for the bank’s 4.9 billion-euros ($6.2 billion) trading loss, lawyers for the bank said.
Jean Veil, a lawyer for the lender, read excerpts from the verdict today as he urged the appeals court to reject the former trader’s bid to clear his name. He praised the “penetrating analysis of the lower court judges.”
Kerviel, 35, is asking the appeals court to reverse his conviction after he was sentenced to three years in prison and ordered to repay the Paris-based bank. He argues that he didn’t betray the bank’s trust and that his superiors knew he was exceeding trading limits. Kerviel also claims the lender unwound his positions as a way to shift attention from an almost 2 billion-euro loss on U.S. subprime mortgages.
In court today, Veil said the bank wants 4.9 billion euros as damages for its financial losses. He said Societe Generale will not seek damages for the harm to its reputation.
Another bank lawyer, Francois Martineau, said Philippe Hoube, a witness offered to support the defense claim that the lender was trying to shift attention from its mortgage losses, “was witness to nothing.” Martineau said Hoube presented no evidence to support the argument, which he called “even more absurd” than a defense claim that the bank knew what Kerviel was doing.
Societe Generale has acknowledged that it failed to heed alerts and red flags that may have enabled it to uncover Kerviel’s trades sooner, Martineau said. The bank didn’t fight a 4 million-euro fine levied by French banking regulators, he said.
“It is true that all of these alerts existed,” Martineau said. “They weren’t spotted or their significance wasn’t appreciated.”
Closing arguments will conclude June 28. A decision is expected later this year.
To contact the reporter on this story: Heather Smith in Paris at hsmith26@bloomberg.net
To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net
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