France's Biggest Rogue Trader to Serve 3-year Prison Term

360update

Business News

By CNN Wire Staff



                           

                                            French rogue trader Jerome Kerviel

    

Jerome Kerviel, the man behind France's biggest rogue-trading scandal, lost his appeal Wednesday against his prison sentence for betting €50 billion (about $65 billion) of a French bank's money without its knowledge.

  

The Paris appeals court upheld the five-year sentence with two years suspended that was handed down in October 2010, Kerviel's current lawyer, David Koubbi, said.

 His former lawyer, Olivier Metzner, had filed an appeal against the sentence.

Wednesday's ruling means Kerviel will serve three years in prison.

    The ruling that Kerviel must pay €4.9 billion (about $6.3 billion) in damages to the bank, Societe Generale was also upheld.

The bank was pleased with the original conviction because it placed responsibility for the rogue trades on Kerviel and not the bank. If Kerviel's conviction is overturned, it could once more raise questions about the bank's role in the scandal.

The bank had previously indicated it may not require Kerviel to pay the damages, as it would be an impossible sum to shell out even in multiple lifetimes.

The former Societe Generale employee went on trial in June 2010 on charges of forgery, breach of trust and unauthorized computer use.

 The banks says the unhedged bets cost it almost $6 billion.

Kerviel had pleaded guilty to the charge of computer abuse, but Metzner had asked jurors in his closing arguments to acquit his client of the charges of breach of trust and forgery.

Metzner previously told CNN that Kerviel's behavior was strongly influenced by the environment at Societe Generale. "The banks are the ones to blame for the banking system and the systematic economic crisis, not Jerome Kerviel," he said.

Kerviel traded European index futures for the bank. He was the only person ever charged in the case, despite claiming he did everything with the knowledge of his superiors.

"I am convinced the criminal file is full of elements proving that my superiors knew and covered for me.    

  At least I shouldn't be the only one in the dock," he told CNN after the release of his memoirs, "Trapped in a Spiral: Memoirs of a Trader," in which he pleads his innocence.

"These managers earned colossal amounts of money out of bonuses based on the ever-growing results that I was making for the bank," he said.

Societe Generale, which said it discovered the losses in January 2008, said that at no time were supervisors aware of Kerviel's alleged unlawful activities.