French rogue trader Jérôme Kerviel sentenced to jail and €4.9bn fine

•Gasps in court as ex-banker's sentence announced
•33-year-old's 'gigantic risk' endangered 140,000 jobs

As Jérôme Kerviel stood to hear the verdict that would decide his fate, not a flicker of emotion showed in his eyes. It was only once the judge had gone and the court had risen that the former trader slumped in his chair and stared down at the floor. He had entered the chamber looking sharp in a suit and shining leather shoes, but left it a broken man.

The ruling read out in Paris's historic Palais de Justice was eagerly anticipated. But few had predicted how hard the court would come down on Kerviel, the man behind one of history's biggest trading scandals.

Accused of breach of trust, computer abuse and forgery, the 33-year-old was convicted of all three charges and was sentenced to five years' imprisonment, with two years suspended. In an order that prompted an audible gasp from court observers, he was also told to pay damages to Société Générale of €4.9bn (£4.2bn) – the total sum of money his risky betting strategies cost his former employers in January 2008.

It is understood the bank views the granting of damages as a symbolic payment, and may not intend to force its erstwhile employee into a lifetime of unpayable debt. Its lawyer, Jean Veil, said the tough verdict was "moral compensation" for a company which insists it knew nothing of the malpractice. "It has been very clearly shown that Jérôme Kerviel's behaviour, his lies, were so sophisticated that the bank could not suspect what he was doing," he added.

Olivier Metzner, the defendant's lawyer, begged to differ. "This is a completely unreasonable ruling which says that the bank is responsible for nothing, not responsible for a creature it has made, and that only Jérôme Kerviel is responsible for the excesses [and] the crises of a banking system," he said, adding that he would "quite obviously" be appealing.

Such outrage was unlikely to cut any ice with judge Dominique Pauthe, whose dense, often impenetrable ruling tore into Kerviel's character and demolished his lawyers' attempts to portray him as the victim of a wider system and global malaise.

According to Pauthe, the Brittany-born computer whizz was a quietly cynical operator who exploited his technological knowhow and market understanding to pull the wool over his employers' eyes.

Exposing the bank to uncovered trades worth €50bn – more than Société Générale's total value – he took risks on a "gigantic scale", all the time maintaining his sang-froid. "The varied nature of his means of forgery and deceit were rivalled only by the dazzling reactivity, the constant cool-headedness and the deceptive serenity which he was able to exhibit on an everyday basis," said the judge.

He added: "Through his deliberate actions, he put in danger the solvency of the bank employing 140,000 people, including him, whose future was seriously endangered … In their size, their specificity and the context of crisis in which they occurred, these acts undoubtedly harmed the international economic order."

During his three-week trial in June, Kerviel admitted placing excessively risky bets on the markets, reiterating previous comments to police that he had been "high on success" and existing in a "virtual world" in which "sums of money no longer had any value". He pleaded guilty to the charge of computer abuse, explaining how he had covered up his positions by entering false data into the system. However, he claimed that he had done this with the tacit approval of his bosses. They, he said, had known what he was doing and encouraged it, as long as he was making a profit. "Your superior asks you to break the rules every day," he said in an interview in May.

This assertion was flatly contradicted by Pauthe and his colleagues on the three-member judging panel, who said there was no proof that anyone else had been aware of Kerviel's reckless behaviour. "The material presented by the defence does not allow us to conclude that Société Générale knew about the fraudulent activities of Jérôme Kerviel," said the judgment.

Metzner and Kerviel were not the only ones to express surprise at this staunch expression of faith in France's second-biggest bank, for which the €4.9bn loss was a potentially devastating scandal that was mildly neutralised only by its timing: the vast scale of global economic upheaval to come throughout 2008, including the collapse of Lehman Brothers and the Bernie Madoff scandal, would serve to relegate its significance.

Soc Gen, as it is known in France, was fined €4m by the financial watchdog in 2008 for lax internal checks that let Kerviel's trading go on apparently undetected.

Many observers said that the contrasting penalties given to the bank and its employee were unfair, and indicative of a wider malaise. Patrick Bonazza, a journalist at Le Point magazine who wrote a book about the global banking crisis, said he was "surprised" by the verdict. It seemed "a bit bizarre", he said, for the court to "make an example of the little people" and leave their superiors untouched. Francois Bayrou, leader of the centrist Modem party, said he found the ruling "infinitely" troubling.

"I think that they wanted to stigmatise a man because it's easier to put a man's head on a plate than the head of a bank … The verdict makes no sense. The verdict says the law is on the side of the powerful. The bank is cleared and we have not called into question the system," Flore Vasseur, the author of a novel inspired by Kerviel's initial fame, told French radio.

In early 2008, as grainy pictures of a broodingly handsome Kerviel spread over the internet and concerns deepened in France over the impact of the sub-prime crisis, the charming trader who had apparently shown two fingers to financial capitalism became the hottest man in town. Sales rocketed of T-shirts declaring the wearer "Jérôme Kerviel's girlfriend", and Facebook groups popped up celebrating the man who had brought Soc Gen to its knees. When more details emerged of the case and the trader's personality, the frenzy died down.

The future for the one-time poster boy, who has been working for two-and-a-half years as an IT consultant on a salary of around ¤2,300 a month, looks uncertain. While he awaits the appeal, he will remain a free man and will not go back to La Santé jail, where he spent a month in 2008. As he sat in silence on his front-row court seat, he refused to talk to journalists. But Metzner spoke on his behalf. "He is revolted; these words were written all over his face," he said. "He is revolted that those who made him have been exonerated of all responsibility."


Lizzy Davies in Paris

The GuardianTramp

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