Rogue trader Kerviel sentenced to three years in prison

Société Générale rogue trader Jérôme Kerviel has been sentenced to three years in prison, plus another two suspended, after a French court convicted him on charges of breach of trust. Kerviel, 33, was also ordered to pay 4.9 billion euros in damages for his covert trades. 

Reuters

In reading the ruling, presiding judge Dominique Pauthe told the court that defence evidence "does not allow us to deduce that Société Générale was aware of Jerome Kerviel's fraudulent activities".

Kerviel has admitted regularly exceeding trading limits and logging false transactions to cover his gambles, but said this was common practice among traders.

At the last hearing in June, his lawyer Olivier Metzner asked how a "normal boy" like Kerviel could "end up here", facing years in jail on charges of breach of trust, forgery and entering false data into computers.

"How do you create [people like Kerviel] if not for financial gain?" he said, referring to the bank.

On discovering the risky deals in January 2008, Société Générale was forced to unwind positions worth 50 billion euros. This was equal to nearly all of its shareholder capital.

The bank has admitted failings in its controls, for which it was fined four million euros in July 2008, but insisted that managers could not have tracked all Kerviel's trades when he logged false data to cover them.