Bloomberg Anywhere Login


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Kerviel Says SocGen Was Sent Weekly Reports on Trading Accounts

Jerome Kerviel, a former trader for Societe Generale, claims the bank knew about the scale of his trades. Photographer: Antoine Antoniol/Bloomberg
Jerome Kerviel, a former trader for Societe Generale, claims the bank knew about the scale of his trades. Photographer: Antoine Antoniol/Bloomberg

June 16 (Bloomberg) -- Jerome Kerviel told a Paris court that he sent weekly reports to his Societe Generale SA bosses, bolstering his claims the bank knew about the scale of his trades before they led to a 4.9 billion-euro ($6 billion) loss.

Kerviel has based his defense since the loss was disclosed on January 24, 2008, on the argument that his supervisors were aware of, and encouraged, his activities.

Kerviel, 33, is charged with falsifying documents, computer hacking and abuse of trust in connection with the trading loss that prosecutors say was caused by the liquidation of 50 billion euros in unauthorized positions. Current and former bank employees have testified they didn’t know of his bets, which he has told the court he “masked” by faking hedges and lying to risk managers.

The treasury reports “to me represented a reflection of my activities,” Kerviel told Judge Dominique Pauthe yesterday. “Every week I made a report and sent it to Eric Cordelle and Martial Rouyere,” his supervisors.

The treasury worked like a small bank for the traders, Kerviel said. He borrowed billions to supplement the 20 million euros he was allotted, based on his trading desk’s 125 million-euro limit, and paid back interest, he said. “It was like an internal loan,” he said.

In the summer of 2007, Kerviel said he borrowed 1 billion to help while he was in a losing position, then, by July, he was ahead again. “None of my superiors asked questions,” he said. They “could see exactly what was in the treasury of each trader.”

‘Strong Rise’

Claire Dumas, deputy to the head of operational risk at Societe Generale, said the fact that Kerviel reported such large results wouldn’t necessarily raise suspicions. Markets “were on a very strong rise” at the time, she said.

Moussa Bakir, formerly a futures broker at Newedge Group who worked with Kerviel placing his bets on exchanges, said he was “naive” in believing Kerviel’s assurances given the volume of trades he was processing.

Bakir told the court he met Kerviel while he worked at Societe Generale prior to joining Fimat, a Societe Generale brokerage spun off in a merger with Credit Agricole SA’s Calyon.

Bakir said he wanted “good figures” going into the new company and was pleased when Kerviel’s business with him grew. “The volume grew, the orders grew, the commissions grew,” he said. There was “nothing unusual to worry me.”

Million-Euro Bonus

Bakir got a 1 million euro bonus for 2007 based in part on the surge in work for Kerviel. The bonus payment was frozen after the trading loss and later awarded to Bakir by a labor court, the former broker said.

When European futures exchange Eurex sent alerts to the bank in November 2007 about Kerviel, Bakir said he knew nothing about the letters, just that Kerviel “was worried.”

The Eurex letters were “requests for information,” said Vincent Duclos, the Societe Generale compliance officer who handled them. There “was never a question of an infraction.”

Duclos said he asked Kerviel and Cordelle to answer the queries and sent back their response, which he said Kerviel told him had been verified by the bank’s controllers. “I responded with all the information I could get,” Duclos told the court yesterday. “There wasn’t any reason to suspect” Kerviel.

Kerviel said he’d never said they’d been verified and denied that he’d “manipulated” Duclos, saying “the artifice was so crude” that it wouldn’t have stood up to Duclos’s review had he checked.

‘Market Manipulation’

Kerviel said his chief worry about the Eurex inquiries was that regulators could accuse him of “market manipulation” because of the large volumes he was trading, and that he could lose his traders’ license. Still, he said he wasn’t worried about Societe Generale’s reaction because “my positions were largely positive for the bank.”

Bakir said he pressed Kerviel to know more about who he was making the bets for and Kerviel told him they were for a client named Matt who worked for a London hedge fund.

“He always spoke of Matt, he had just been on the phone with Matt,” Bakir said. “I believed Jerome Kerviel without a single doubt.”

Kerviel told the court he hadn’t said Matt was a client. He’d used the name because Bakir “was insistent,” he said.

Taoufik Zizi, a junior trader who sat next to Kerviel on the Delta One desk and was later fired for incompetence, said the “star trader” asked to enter trades on his and other traders’ computers using their log-in information.

Gains Made

Kerviel said “it was very often at the request of the other traders that I would go onto their computers” and that he never benefitted personally from gains made on those positions.

Societe Generale, France’s second-largest bank by market value, blames Kerviel for the loss and has asked the court to award it the full 4.9 billion euros in damages.

Carlos Goncalves, deputy chief information officer at the lender, testified that Kerviel’s activities were more difficult to track than the defense has argued.

“Without knowing precisely what you’re looking for,” Goncalves said, “it would be impossible to have a global vision” of the problem.

To contact the reporters on this story: Heather Smith in Paris at; Carol Matlack in Paris at

To contact the editor responsible for this story: Anthony Aarons at

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.