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'Rogue trader' Kerviel must pay damages of 1 million euros

A French court has told Jerome Kerviel to pay 1 million euros to his former employer Societe Generale for losses he incurred through equity derivative trades. Kerviel has said he will fight against the ruling.

The French appeals court in Versailles, near Paris, on Friday ruled that Kerviel was "partly responsible" for multibillion losses that the bank Societe Generale suffered in 2008 through the trader's reckless financial risk-taking.

Kerviel had initially been ordered to repay the entire lost sum of 4.9 billion euros ($5.5 billion euros) when convicted of breach of trust and fraud in 2010, but that decision was subsequently struck down, resulting in Friday's ruling over just 1 million euros.

However, Kerviel said on Friday that even this sum was too high.

"I'm hoping to get to zero (civil damages) in the end, because I still think I do not owe anything to Societe Generale. The battle continues," he told reporters following the ruling, which can be appealed.

The case "used to be about 4.9 billion euros. It doesn't exist anymore," he added.

A lawyer for Societe Generale described the ruling as "completely satisfactory." The bank has appealed against a labor tribunal ruling in June that ordered it to pay Kerviel 450,000 euros in damages for dismissal "without genuine or serious cause."

'Deficient security systems'

The Versailles court itself said on Friday that the bank had a "deficiency" in its management controls and security systems and had thus played a role in the size of the losses, which Kerviel would anyway have had no realistic way of repaying.

In 2010, Kerviel was also sentenced to five years in prison, two of which were suspended: he ended up serving just 150 days. In 2014, the Cour de cassation, France's highest court, upheld Kerviel's criminal conviction and jail sentence, but annulled the 4.9 billion-euro civil damages, arguing that the bank was also responsible for its own losses.

The affair is one of the biggest ever trading fraud cases. Kerviel himself has always maintained that the bank had been concerned only with profits and prepared to turn a blind eye to fraudulent practices. He is alleged to have made Societe General 1.9 billion euros before the financial crisis of 2008 accelerated his losses.

tj, (AFP, AP, Reuters)

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