Société Générale rogue trader Jerome Kerviel to stand trial next year

• Jerome Kerviel accused of causing record €4.9bn losses for French bank
• Trader faces up to five years in prison and €375,000 in fines if convicted

Former Société Générale trader Jerome Kerviel is to stand trial next year over claims that he cost the bank billions of euros through a series of allegedly rogue transactions.

The bank welcomed the news and has claimed that the junior trader's unauthorised deals caused the record losses of €4.9bn (£4.31bn), which it unveiled last year.

Investigating judges Renaud Van Ruymbeke and Françoise Desset sent the case to a Paris court yesterday, a judicial official said. The trial is expected to start early next year.

Since the losses came to light Kerviel has argued SocGen knew what he was doing, while the bank insists he acted alone.

Jean Veil, lawyer for SocGen, welcomed the decision. Although he had not yet seen the judges' order, he said it appeared that "Société Générale's thesis was confirmed". One of Kerviel's lawyers, Francis Tissot, called the move "regrettable".

The judges threw out a request from prosecutors to send Kerviel's assistant, Thomas Mougard, to trial as well. He was accused of "complicity in introducing fraudulent data in a computer system". Mougard has denied the accusations, arguing he was not aware of the illicit nature of the transactions he was asked to carry out.

Kerviel is charged with forgery, breach of trust and unauthorised computer use, and faces up to five years in prison and €375,000 in fines if convicted. He has admitted building up non-authorised trading positions but has argued his supervisors turned a blind eye while he was making money for the bank, and intervened only when he started to suffer losses.

In January this year, French investigators wrapped up their 12-month probe into €50bn of unauthorised trading positions built up by Kerviel.

At the start of the investigation last year, Kerviel spent six weeks in jail and was then released under judicial supervision. In June, the Paris prosecutor's office requested that Kerviel stand trial, and judges finalised the decision with a formal order yesterday.

The independent investigations and the bank's own internal inquiries into the scandal have found that its managers and control systems failed to operate properly and ignored warnings. A report by PricewaterhouseCoopers blamed the "culture" at the trading desk, describing it as "overheated".

France's central bank has fined SocGen €4m for "serious shortcomings" in its internal controls that led to the trading losses. Kerviel's legal team is trying to go further and prove that the bank knew what was actually happening.

Employed at the bank since 2000, Kerviel worked his way up from a desk that monitors traders to a job on the futures desk, where he invested the bank's money by making huge bets on the future direction of European stock exchange prices.

He is accused of causing five times the financial damage inflicted by Nick Leeson, the rogue trader who sparked the collapse of Barings Bank in 1995 with losses of £800m.

Contributor

Julia Kollewe

The GuardianTramp

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