- Versailles appeals court to rule on responsibility for loss
- Separate court could order fresh criminal trial on March 21
Jerome Kerviel sought the suspension of a French trial into whether he is responsible for Societe Generale SA’s 4.9 billion euros ($5.4 billion) trading loss eight years ago until another court rules on the rogue trader’s bid for a retrial of his criminal conviction.
The Versailles court of appeals said Wednesday it would rule Jan. 29 on whether to delay the case. A suspension would allow the justice system to decide “calmly” on the criminal part of the case, David Koubbi, Kerviel’s lawyer, said before the start of the damages trial. In separate proceedings, Koubbi has asked for a new criminal trial and France’s court of review and reassessment is set to rule on the matter on March 21.
“After that, if he’s deemed guilty -- because that’s the order in which things are meant to go in such cases -- the justice system will be able to decide whether there are damages,” Koubbi said in reference to Societe Generale’s trading losses.
France’s highest appeals court in 2014 upheld a verdict that found Kerviel guilty of abusing the bank’s trust, faking documents and entering false data into computers that resulted in the massive loss. Still, the court accepted Kerviel’s appeal contesting the bank’s claim that he was solely responsible for any losses that resulted from unwinding his trading positions. The Versailles appeals court was set to examine that issue from Jan. 20 to Jan. 22.
Versailles judges shouldn’t suspend the damages trial given that Kerviel’s bid for a retrial still hasn’t been deemed admissible -- otherwise proceedings could last indefinitely, said Francois Martineau, a lawyer for Societe Generale.
Koubbi has said in the past week that he’s obtained evidence that raises fresh questions about the case. A covert recording of a senior prosecutor casts doubt on a number of issues regarding SocGen and the handling of the investigation by French authorities, according to Koubbi.
The tape was made last June by Nathalie Le Roy, the police officer who led Kerviel probes in 2008 and 2012, and last year told a French judge about her own misgivings about the case.
“Societe Generale knew, they knew,” Chantal de Leiris, a former vice-prosecutor on the case, told Le Roy, according to a transcript of the June 17 conversation read by Koubbi to Bloomberg News. “That’s obvious, obvious.” De Leiris also questions the amount of the loss underlining that there was “not one single expertise” on the prosecutors’ side, according to the transcript.
De Leiris told French newspaper Le Monde on Wednesday that prosecutors’ investigations were carried out objectively and rigorously. The former vice-prosecutor said the covert recording itself was a manipulation, according to Le Monde.
De Leiris declined to comment when contacted by Bloomberg.
Koubbi said fresh probes are under way after he submitted complaints for forgery and use of forged documents, witness subordination as well as obtaining a ruling under false pretenses.
While he didn’t back Koubbi’s request for an indefinite suspension, Jean-Marie d’Huy, the assistant public prosecutor, said it’s important for the Versailles appeals court to see the findings of these investigations before ruling on any damages.