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| Laurent Cipriani / AP |
Remember him? Back in 2008, Societe Generale rogue trader Jerome Kerviel caused international consternation when the French bank discovered that he had covered up risky bets worth nearly 50 billion euros (~$69 billion dollars) between late 2007 and early 2008. SocGen, one of France’s most respected banks, thoroughly dismayed at the revelation, was subsequently forced to unwind Kerviel’s positions to the tune of a 4.9 billion Euro (~$6.7 million dollar) loss. Now, Kerviel is being forced to pay dearly for his misdeeds, down to the last penny.
Kerviel was arrested in January 2008 and held for six weeks in the notorious La Sante prison in Paris. The charges brought against the notorious rogue trader included forgery, breach of trust and unauthorized computer use. The sentence, handed down Tuesday morning by French judge Dominique Pauth, calls for the 33-year-old Kerviel to pay back all the money he lost on behalf of the bank: $6.7 billion dollars. In addition to the ‘stiff’ fine for, Kerviel was sentenced to five years in prison, with two suspended. The soft-spoken Kerviel will certainly be unable to pay the fine, especially given the fact that while trading for the bank he took home only salary + bonus of around $155,700. There were reportedly audible gasps in the packed courtroom when the verdict was handed down while Kerviel sat, arms folded, frozen in presumable shock. French media calculated that given his current salary of euro2,300 working as a computer consultant, it would take Kerviel 177,536 years to pay down the record fine.
The sentence will be carried out pending an appeal of the decision. Kerviel’s lawyers feel the sentence is unduly harsh, and that French authorities are making their client a scapegoat for the ills that plagued big banks during the global financial crisis. Kerviel contends that his bosses tolerated his egregious risks up until the point they stopped making the bank money. By the end, he had taken out bets on futures contracts that exceeded the market value of the entire company. After the verdict this morning, SocGen shares rose nearly 1%.
Somebody buy this poor kid a drink.
Information courtesy of AP.
