Jerome Kerviel’s 50 billion euros ($61 billion) in unauthorized trades were a “catastrophe” for Societe Generale SA, former chief executive officer Daniel Bouton told a Paris court today.
France’s second-largest bank by market value lost 4.9 billion euros in the process of liquidating Kerviel’s accounts over three days in January 2008 as markets fell worldwide.
“Fifty billion euros is monstrous,” Bouton said, standing before the court, two chairs from where Jerome Kerviel sat. “It was a catastrophe.”
Kerviel, 33, is accused of abuse of trust, faking documents and hacking the bank’s computers to hide positions that exceeded his mandate with faked hedges. Kerviel has argued his superiors were aware of and condoned his bets. Bouton resigned as chief executive officer in April 2008 after a 5.5 billion-euro capital raising campaign, and stepped down as chairman in 2009.
Someone at the center of the bank’s operations “had the capacity to fabricate, to lie,” Bouton said, recalling the moment over the weekend of Jan. 19, 2008, when the bank realized what had happened. When asked about his work, “the trader continued to lie. He didn’t help us. He left us alone to discover it the next day.”
Bouton is the final witness called in the three-week trial ending June 25.