'Rogue trader' Jérôme Kerviel's trial begins in Paris

• French trader accused of losing Société Générale £4bn
• Kerviel, who claims SocGen supported him, faces five years in prison

The trial of former investment banker Jérôme Kerviel accused of carrying out one of the biggest trading frauds in history will open in Paris tomorrow.

The 33-year-old ex-trader is accused of losing Société Générale, France's second biggest bank, €4.5bn (£4bn) through unauthorised speculative trades.

At one point before his arrest in January 2008, Kerviel was reported to be trading around €50bn (£42bn) – roughly 25% more than the bank's market value.

Société Générale claims Kerviel made these unauthorised deals, which far exceeded his trading limits, then covered up the massive sums involved with fictitious transactions.

The accused admits he took "excessive risks" but claims the bank not only knew what he was doing but supported him while he was making them money. He says they only turned him into a scapegoat when the deals became public.

"I was wrong and committed errors, faults even, but I was serious and efficient at work and the fact my bosses protected me and I was promoted during my short career shows this," he wrote in his recently published book, The Spiral: Memories of a Trader.

"What's more I never stole a single centime."

He adds: "All that I did was made possible thanks to a sort of complicity by laisser-faire."

Kerviel faces charges of breach of trust, forgery and fraudulent use of the bank's computer system, which he denies. If convicted he faces up to five years in prison and a maximum fine of €375,000 (£310,000).

The French banking regulator gave Société Générale a record fine for failures in its controls, but the bank has denied any knowledge of or complicity in Kerviel's trading.

In France, the case epitomises everything seen as wrong with Anglo-Saxon capitalism and the "greed is good" years of banking excess and Kerviel has tapped into the moral zeitgeist of the post sub-prime crisis in his book.

"At the heart of the great banking orgy, traders are only given the same consideration as any street prostitute: a quick thank you for a good day's takings," he writes.

"In a trading room the ideal modus operandi can be summed up in one phrase: knowing how to take the maximum risk to gain the bank the maximum money.

"In the name of such a rule, the most elementary principles of caution don't count for much."

The French business daily paper Les Echos believes this is why the case still attracts public attention.

"With Kerviel the public was given a direct view into the black box of financial markets. It discovered to its horror the world of the 'trading floors' and the enormous transactions carried out there. That was the end of January 2008.

"Since then Lehman has gone down, AIG has been nationalised, Madoff has been unmasked and Goldman Sachs is now suspected of having knowingly cheated certain clients.

"In short, other monuments have toppled. As a result, what at the time looked like the isolated act of a young man, with hindsight now appears emblematic of the entire system."

The trial is expected to last three weeks.


Kim Willsher in Paris

The GuardianTramp

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