SocGen's unwinding of former trader gets fresh scrutiny

Spotlight

Societe Generale had turned the page on Jerome Kerviel’s record trading fraud. Until yesterday.

Bloomberg reports that the Cour de Cassation, France’s highest appeals court, yesterday ruled that the bank’s 2008 unwinding of the former trader’s unauthorized bets of more than $70bn -- exceeding the market value of the lender -- needs fresh scrutiny. The court accepted the former trader’s civil appeal that challenged the bank’s claim that he was solely responsible for the lender’s $6.77bn loss from liquidating the positions.

“The spotlight will be on the bank again,” said Jerome Forneris, who helps manage $11.74bn at Banque Martin Maurel in Marseille and owns Societe Generale shares. “For sure they wanted to be completely finished with this affair.”

While the court confirmed Kerviel’s three-year jail sentence from a 2012 verdict that found him guilty of abusing the bank’s trust, faking documents and entering false data into computers, its decision to get a court in Versailles to re-examine the facts of the case was claimed as a victory by Kerviel’s lawyers.

To access the complete Bloomberg article hit the link article

Societe Generale's Unwinding of Kerviel Bets in Spotlight Again

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