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French trader Kerviel found guilty in Societe Generale fraud trial

A French court found rogue trader Jerome Kerviel guilty of covert stock trading on Monday, which cost Societe Generale almost five billion euros. He was sentenced to three years in prison.

Former Societe Generale trader Jerome Kerviel

Kerviel was found guilty on all charges

A Paris court found former Societe Generale trader Jerome Kerviel guilty of breach of trust, computer abuse and forgery, and sentenced him to three years in prison with an additional two-year suspended sentence.

Prosecutors had been seeking a four-year prison term for the 33-year-old.

The court found him guilty of placing unauthorized bets worth around 50 billion euros ($68.4 billion), which led to his former employer making almost five billion euros in losses.

The court has ordered Kerviel to repay the 4.9 billion euros in damages and interest.

At the close of the high-profile trial in June, Kerviel's defense team submitted a guilty plea to computer abuse, but rejected the other two charges.

Kerviel had also admitted to the court that he had regularly exceeded trading limits and logged false transactions to cover his stock gambles while employed at the French banking giant. He maintained throughout the court proceedings, however, that his bosses turned a blind eye to the practice, which he said was commonplace among traders at the bank.

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

Presiding Judge Dominique Pauthe agreed with this view, concluding that defence evidence heard during the trial in June "does not allow us to deduce that Societe Generale was aware of Jerome Kerviel's fraudulent activities."

The affair almost brought down Societe Generale, one of Europe's biggest banks.

Author: Darren Mara (AFP/AP)
Editor: Chuck Penfold

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