Kerviel Sues SocGen for 5.7 Billion Euros Over 2008 Firing

French Banks Societe Generale, BNP Paribas, and Credit Agricole

The headquarters of Societe Generale SA stand in Paris.

Photographer: Balint Porneczi/Bloomberg
  • Rogue trader was found liable for record trading loss at bank
  • Employment lawsuit is latest twist in saga over Kerviel

Jerome Kerviel, who was convicted of causing a record trading loss of 4.9 billion euros ($5.5 billion) at Societe Generale SA, is suing the French bank for even more in a Paris employment lawsuit that claims he was unfairly dismissed in 2008.

Kerviel, who is seeking 5.7 billion euros in compensation, believes Societe Generale had no grounds to fire him for gross misconduct because the bank was well aware of his trading activities, his lawyer, David Koubbi, told a court on Thursday.

The lawyer justified the tit-for-tat demand for compensation, saying that it was only fair because the bank had previously pressed for Kerviel to pay back the full trading loss.

Jerome Kerviel
Jerome Kerviel
Photographer: Marlene Awaad/Bloomberg

“Societe Generale has created a legal precedent by which you are allowed to ask for 4.9 billion euros in damages without any proof,” Koubbi said.

The employment tribunal hearing is the latest twist in the story of the former trader who has taken equal turns as villain and folk hero since he was blamed for causing the record loss at France’s second-largest lender. In 2014, before serving five months of a three-year prison sentence, he said he was inspired by a brief meeting with Pope Francis to take a 1,400-kilometer walk from Rome to Paris.

“This is a preposterous and baseless request,” Societe Generale lawyer Arnaud Chaulet said at Thursday’s hearing. A ruling is expected on June 7.

Deaf Ears

While an order requiring him to repay the amount of the trading loss has since been canceled, Kerviel’s claims that he wasn’t responsible for the scandal have fallen on deaf ears in French courts.

Several verdicts found Kerviel exclusively guilty for the trading loss, yet he contests the amount of the loss and considers Societe Generale should also be held responsible. The former trader has mounted a fresh legal challenge after Nathalie Le Roy, the police officer who led Kerviel probes in 2008 and 2012, last year expressed concerns about how she was pressured to focus solely on evidence that would incriminate him.

France’s court of review and reassessment in March indefinitely delayed its verdict on this bid for a retrial. Judges said they want to wait for separate lines of inquiry into the use of forged documents, witness subordination and obtaining a ruling under false pretenses to run their course. Additionally, a civil trial over the amount Kerviel owed Societe Generale is scheduled for June.

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