The junior French trader responsible for bringing his bank to its knees when he bet €5 billion (£3.7 billion) on a falling stock market broke his silence yesterday to claim that he had got “a little carried away” as he lost touch with financial reality.
J?rôme Kerviel, 31, accepted that he had made mistakes but said that he had been turned into a scapegoat by Soci?t? G?n?rale, his employer.
In his first interview since he was placed under investigation in connection with the biggest rogue trader scandal in history, Mr Kerviel sought to offload blame on to the bank itself.
“I assume my share of responsibility, but I will not be the Soci?t? G?n?rale’s scapegoat,” he said in the interview with Agence-France Presse.
He has told investigators that the bank knew and approved of his unauthorised bets and that other traders had engaged in similar practices. Dressed in jeans and a white checked shirt, and speaking in a quiet and uncertain voice, he said: “I never had personal ambition in this affair. The aim was to earn money for the bank.”
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His comments came a day after he had been questioned for eight hours by the French investigating magistrates Renaud van Ruymbeke and Françoise Desset. They are seeking to find out how Mr Kerviel was able to gamble the equivalent of Morocco’s gross national product on European futures markets undetected.
When the positions were unwound, SocGen made a loss of €4.9 billion, virtually wiping out its 2007 profits and turning the 144-year-old institution into a takeover target.
Mr Kerviel is being investigated for breach of trust, falsifying and using falsified documents and breaching computer access codes. Mr Kerviel said: “You lose any notion of the sums when you are involved in this sort of job. It’s dematerialised. You get a bit carried away.”
Portrayed by colleagues as fragile and out of his depth in SocG?n’s market room, he said “I am neither suicidal nor depressive” and insisted that he had never considered fleeing French justice. However, he described media interest in the scandal as “truly oppressive” and said that he had not realised the full extent of the international repercussions of his actions. He said that he had followed the case in the press and on the internet from a friend’s house in the Paris region, where he is staying under round-the-clock police protection. He had made limited contact with relatives to shield them from the media spotlight.
On Friday, a French tribunal will hear an appeal by prosecutors against the decision by Judge van Ruymbeke and Judge Desset to release Mr Kerviel on bail.
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“I will be there on Friday and have every confidence in my lawyer [Maître Elisabeth Meyer],” he said.
Mr Kerviel has also appointed an agent, Christophe Reillein, in a sign that he intends to counter SocG?n’s accusations in the media as well as in the courts.
The move came as Le Monde, the newspaper, disclosed details of the weekend when the bank’s management uncovered Mr Kerviel’s hidden dealings, which had produced a profit of €1.4 billion in 2007.
“I’ve discovered a martingale on the futures contracts on the Dax by juggling with the opening hours,”
Mr Kerviel is reported to have said. A martingale is a probability theory first developed as a gambling strategy in 18th-century France, which involved doubling the bet after every loss. None of Mr Kerviel’s superiors believed his story about the martingale.
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“When we asked him about a precise fact, he admitted it, told the truth for two or three minutes and then lost himself in confused and untruthful explanations,” a source said.
“He closed up like an oyster. He was unable to remember the losses he ran up for the bank. He could only remember the profits.”
Last night, Christian Noyer, the Governor of the Bank of France, said that he was mystified by the scandal.
“The reality is that we can’t explain it. It seems improbable, it seems incomprehensible to us,” he told the French parliament’s finance committee. He denied that the January interest-rate cut by the US Federal Reserve had been prompted by a warning that the SocGen scandal was about to erupt. Mr Noyer also defended the French banking system as “perfectly solid”.
J?rôme Kerviel, education and career (so far)
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Age: 31
Birthplace: Pont l’Abbe, Brittany
Education: Masters in Finance at the University of Lyon, September 2000. Bachelor degree in Finance from the University of Nantes, 1996-99
Work: Soci?t? G?n?rale, Paris
Experience: Trader and market-maker for Delta One Products, 2004 to 2008. Trader assistant, basket trading and Delta One Products, 2002 to 2004. Middle office referential team, 2000 to July 2002. Products modelling, process automation, Excel macro development for the exotics desk
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Hobbies: judo, sailing