Jérôme Kerviel faces first day of trial over lost billions

• French trader stays silent as trial begins amid media scrum
• Lawyer claims bosses encouraged speculation

For two and a half years, the jury has been out on Jérôme Kerviel. To some, he was a run-of-the-mill trader who gambled vast sums of money with the tacit approval of his seniors; to others he was a duplicitous addict who sought personal validation in breaking the rules.

To Kerviel's legion of fans, meanwhile, he was the brooding cult hero who dealt a blow to the financial system when the global crisis had yet to unfold.

Today, as he made his way down the lamp-lit arches of the galerie des prisonniers for the first day of his trial in Paris, the 33-year-old betrayed no emotion and refused questions from the world's media gathered in a scrum around him. And so the apparently banal question asked of him later by the judge, Dominique Pauthe, was laden with significance: "Who are you, M Kerviel?"

The true motivations of the mild-mannered banker from Brittany – whose €4.9bn (£4.1bn) loss from Société Générale made him a household name in January 2008 and rocked a financial world which had yet to witness the collapse of Lehman Brothers or heard of Bernie Madoff – will be central to the trial at the Palais de Justice.

Lawyers for France's second-biggest bank insist he was a rogue trader who, despite not stealing any of his profits, went to great lengths to hide the extent of his speculation from his bosses.

Kerviel's lawyer, however, argues that his client's seniors knew exactly what he was up to. He was simply, says Olivier Metzner, the only one to get caught.

"I think public opinion should know that it is not a man at fault here but a system," said Metzner, one of the leading lights of the Paris bar, as he made his way to court today. "He who is appearing before the court is a pawn, a pawn that was used … and which, when he was no longer needed, was thrown away."

During the course of the long-awaited three-week trial, between 40 and 45 witnesses – most of them traders or other banking figures – are expected to be called to give their testimony relating to Kerviel's multiple charges of breach of trust, forgery and unauthorised computer use.

If found guilty, the man behind one of the biggest trading frauds in history faces up to five years in prison and a fine of €375,000.

Dressed in a grey pinstripe suit and tie, Kerviel took the opportunity today to reiterate what he has claimed ever since news of the scandal broke in 2008: his supervisors had been aware of his activities, even when he was betting €49bn – more than the value of Société Générale itself – on a series of trades on stock exchange futures.

Rather than reining him in, he told the court, they pushed him on through a laissez-faire attitude.

"The daily encouragements from my superiors did not hinder me; they encouraged me instead," he said.

With the help of a plan of his client's office, Metzner proceeded to ask him if, when four of his bosses were sitting within three metres of him, "Kerviel acting alone could have done things without anyone noticing". "For a year, no, it's impossible," replied the accused. "On a trading desk we are all within 50cm of each other. Everything is seen; everything is heard."

In stark contrast with Metzner's argument that it should be the excesses, greed and lax regulation of the financial sphere on trial and not Kerviel, Société Générale's legal team wants to prove that the former employee was acting alone.

Although it was fined €4m by the French banking commission in 2008 for its failure to efficiently control its trading floor, the bank denies any knowledge or involvement in what it has called Kerviel's "financial terrorism".

Jean Veil, another supremo of Parisian legal circles, insists the fact that Kerviel hid not only his losses but his gains – in one instance, these totalled €1.4bn – shows that his activities were not in the interests of the bank.

According to the prosecution, Kerviel – a young man from the provinces who had studied at a mainstream French university rather than at one of the elite grandes écoles – was driven to drastic measures in part because of a need to ease his sense of inadequacy.

In a book published last month, entitled L'Engrenage: Mémoires d'un Trader (The Spiral: Memories of a Trader), Kerviel admits that he felt "an anxiety to do better and better", but rejects the suggestion that this was caused by the contrast between his modest upbringing and those of his colleagues.

"Was your profession a means of positioning yourself vis-a-vis the outside world?" asked Judge Pauthe.

"Not at all," said Kerviel, who now works as an IT consultant on a salary of €2,300 a month. "Most of my friends were at the Société Générale."

No ordinary Jean-Paul

Ever since he was released from a brief spell in prison and sent back into the wider world – a world in which he had a fan club and a Hollywood script based on his life purportedly in the pipeline – the man responsible for the most extraordinary scandal in French banking history has done everything he can to portray himself as just another ordinary Jean-Paul.

Jérôme Kerviel has found a job at an IT consultancy in the north-west suburbs of Paris. He has a new bank account – and not one at Société Générale. He enjoys walking his dogs, a maltese and a cavalier King Charles spaniel. And he speaks to his mother, a hairdresser in his native Brittany, every day on the phone.

"To re-become Mister Nobody, to rediscover peace and anonymity," was how he explained his new life to the French daily Libération last month.

Yet the everyman image jars slightly with the portrayal of himself that Kerviel gives in his book, Spiral: Memoirs of a Trader. In it the former investment banker comes across as arrogant: proud of his "excessive risks" and "errors", and bragging that, although he was playing the same game as everyone else, he was playing it with even more flair and bravado.

Add to that the torrent of media appearances that "Mister Nobody" has made in recent weeks, and the persona is unclear. Perhaps Hollywood will succeed in recounting the Kerviel narrative where he himself has failed.

Contributor

Lizzy Davies in Paris

The GuardianTramp

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