French trader arrested after fraud, odyssey

By: 11 years ago

Former trader Jerome Kerviel, closes his eyes during at a press conference in front of his hotel, in Ventimiglia, Italy, near the French border, Sunday, May 18, 2014. The rogue trader facing three years in prison for one of the biggest trading frauds in history is appealing to the French president for mercy. Jerome Kerviel, who almost took down his bank, Societe Generale, with 4.9 billion euros in losses, has been on a months-long pilgrimage back to France after meeting the pope. He stopped his return just short of the border Saturday. Kerviel, convicted in 2010, insists he was the victim of a system that allowed his illegal trades as long as they made money. An appeals court threw out a fine equal to his losses, but upheld his prison sentence. Kerviel is supposed to report to start his sentence by Sunday or be considered a fugitive. AP

PARIS— A Frenchman convicted of one of history’s biggest trading frauds returned home to serve prison time after a legal saga that captured the national imagination, a pilgrimage to the pope and a plea for presidential clemency.

Former Societe Generale trader Jerome Kerviel was shown in footage broadcast on French television crossing the border from Italy to France by foot late Sunday night.

A police official in the French border town of Menton said Kerviel was in custody in a local precinct just after a midnight deadline to begin serving his sentence. It was not immediately clear when or where he would be taken to prison.

Kerviel cost Societe Generale 4.9 billion euros in losses in 2008, rocking the banking world just before the financial market meltdown. He argued that the bank had quietly welcomed his unauthorized trades when they made money, but turned against him when his trades turned sour.

French judges found Kerviel guilty anyway. He was sentenced to three years in prison in a 2010 verdict that was upheld recently by France’s highest court.

But he gained nationwide supporters and turned himself into a crusader against a corrupt financial world.

“The fight will continue regardless of what happens,” he told journalists while walking toward the border Sunday night.

Before the deadline to begin serving his sentence, Kerviel traveled to Italy to meet the pope and on Saturday appealed to French President Francois Hollande to intervene. Hollande’s office said it would consider a specific request for mercy “according to the usual procedure.”

But Finance Minister Michel Sapin described Kerviel on Sunday as a criminal.

“The crook is caught, the crook is convicted, the crook should of course serve his sentence,” Sapin said Sunday on LCI television.

An internal report by Societe Generale found that managers failed to follow up on 74 different alarms about Kerviel’s activities. A few executives resigned, and Kerviel’s superiors were questioned, but none faced charges.