French court to rule on rogue trader acquittal plea

A French appeals court will rule on Wednesday on rogue trader Jerome Kerviel's plea for acquittal in a fraud case that cost Societe Generale bank 4.9 billion euros ($6 billion) in losses. The 35-year-old, who is unemployed, was convicted in 2010 and awarded a three-year jail term and ordered to pay back the 4.9 billion euros his gambles cost his former employer, nearly ruining it. Kerviel's lawyers ended a four-week appeal trial at the end of June arguing that he should be acquitted. They said the bank was in the loop that he was making uncovered bets on futures markets and termed the case a "farce". Prosecutor Dominique Gaillardot had urged the court in June to make an example of Kerviel, whom he described as "perverse and manipulative" by calling for a maximum five-year term. "Your decision will be an example and a deterrent," Gaillardot said then. Kerviel argued during the appeal that he was not responsible for the loss and had acted with the knowledge of his superiors who he said turned a blind eye as long as he was making a profit. "I have never lied to the justice system," he said, comparing himself to a hamster in its wheel. Kerviel was for many a symbol of the excesses of the global financial system, which he has described as a "big banking orgy", and even became a cult hero in France. A small-town boy from Brittany, Kerviel had argued that he was a scapegoat and that Societe Generale must take responsibility for his gambles. He did not profit personally from his unauthorised 50 billion euros of uncovered bets on futures markets and has not served any jail time since his October 2010 conviction for breach of trust, forgery and entering false data into computers during the covert stock market deals. Kerviel changed his lawyer in March this year, hiring David Koubbi, who represented French writer Tristane Banon in her unsuccessful attempted rape case against the disgraced ex-IMF boss Dominique Strauss-Kahn. Koubbi had launched two countersuits against the bank. One accuses it of manipulating secret recordings to make it appear that the trader's superiors were unaware of his activities. The other says that while Kerviel was ordered to repay the money he lost, the firm has already been repaid a third of the sum in the form of a tax write-off. Societe Generale, which said in 2010 that it would spare Kerviel from paying the full compensation, has hit back with two suits for malicious falsehood. Since the Kerviel case exploded, banks have insisted that internal safeguards be reinforced to prevent a repeat, but fresh trading scandals continue to erupt. In 2011 a London-based trader was charged with fraud after losing Swiss bank UBS $2.25 billion, while US bank JPMorgan this year announced more than $2 billion in derivatives trading losses. Those losses were blamed on another French trader, Bruno Michel Iksil, nicknamed the "London Whale" and "Voldemort" -- after Harry Potter's evil nemesis.