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The world's most famous rogue trader is about to have his encounter with the criminal justice system. Jerome Kerviel, made famous by transactions he made while a trader at Societe Generale, will go to trial.
He's been charged with forgery, breach of trust and unauthorized computer use. If the French legal system finds him guilty, he could spend up to five years in prison and face a fine of up to €375,000.
Kerviel allegedly made unauthorized trades that cost SocGen more than €5 billion. The losses -- and underlying activity -- came to light in January 2008 as one of the largest trading losses ever to be sustained.
The trader (unsurprisingly) claims that his bosses were told how risky his trades were but had no problem with his moves -- as long as he was making money for the bank. Kerviel claims that their perspective changed only when his record turned south. SocGen says that Kerviel acted alone.
The decision by the investigating judges to send Kerviel to trial in Paris comes on the heels of a year-long inquiry, which was concluded last January. The prosecutor's office in Paris requested in June that Kerviel be sent to trial, which culminated in the decision by judges Renaud Van Ruymbeke and Francoise Desset this week.
After spending six weeks in jail at the beginning of 2008, when the investigation began, Kerviel was released but remains under judicial supervision through the trial, which is expected to commence in early 2010.
Kerviel worked at SocGen from 2000 until his discharge as a result of this alleged impropriety. During this time, he advanced from a position monitoring traders to one on the futures desk, where he invested the bank's money in European equity market indices.
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