French Rogue Trader Jerome Kerviel Jailed For Five Years And Ordered To Pay Back £4.1Bn

[interestrateripoff]

http://www.dailymail.co.uk/news/article-1317807/Jerome-Kerviel-sentenced-5-years-jail-4-1bn-forgery-scandal.html

Rogue trader Jerome Kerviel was given a five-year prison sentence today after being found guilty of causing the financial collapse which cost his bank £4.1billion.

He has also been ordered to pay back the astronomical amount – meaning he faces financial ruin. At his current salary of £2,000 a month it would take him 170,000 years to fulfil this demand.

A court in Paris decided that the 33-year-old was responsible for the disaster at French bank Societe Generale – the first of the global meltdown of 2008.

Kerviel, dressed in a black suit and tie and white shirt, listened intently as Dominique Pauthe, president of the bench, read out his sentence of five years, with two suspended.

‘He knowingly went beyond his remit as a trader,’ said Mr Pauthe.

This followed prosecutor Michel Aldebert accusing Kerviel of starting a ‘financial tsunami’, while Kerviel’s former bosses at SocGen said he was a ‘financial terrorist’.

And yet the bankers who created the mortgage timebomb walk free and keep their ill gotten gains whilst the taxpayer foots the bill.

[Mr Yogi]

Surely the possibility of such a rogue trader going bonkers is a well-known and constant threat; the bank's systems should provide the neccessary checks and balances to ensure that this cannot happen. The bank's board is ultimately responsible for this failure. They should be fired and it is they who should be facing financial ruin.

He has also been ordered to pay back the astronomical amount – meaning he faces financial ruin. At his current salary of £2,000 a month it would take him 170,000 years to fulfil this demand.

I have no knowledge of French law but won't he simply go bankrupt and start again with a clean slate? This sounds like one of those silly sentances they have in the USA - 900 years jail with no parole...

Edited October 5, 2010 by Mr Yogi

[sbn]

The way they are all paper is inflating at the moment, he should be able to pay this off by Xmas AND have a few trillion left over to put an orange in his kids stocking.

Joyeaux Noel!!!

[RufflesTheGuineaPig]

I imagine he will appeal since the losses were caused not by his trading but by the way the bank sold what he had bought, by baiscally dumping it on the market rather than through a controlled sale.

[thecrashingisles]

Is this a harsh sentence pour encourager les autes? Traders might be more circumspect about risk if they thought they could be held accountable.

[JustAnotherProle]

Is this a harsh sentence pour encourager les autes? Traders might be more circumspect about risk if they thought they could be held accountable.

Yeah it is harsh, I would rather do the 200,000 years of community service than pay that much back

[Agentimmo]

No real sympathy for JK. He played with fire, he got burnt.

If it wasn't him, it would have been somebody else. He just happened to be holding the bomb when the music stopped.

The real shock comes on hearing the bank, SG, was absolved of blame and that the judge imposed that the 4.9Billion euros be paid back. The judge accepted that JK didn't get any personal gain from his trading. ie. he didn't set out to steal the money, just make himself look good in order to trouser a big fat bonus. Much like the rest of his colleagues on the trading floor.

Does this mean that future bank losses will be blamed on the traders

I doubt it.

[Bloo Loo]

http://www.dailymail...ry-scandal.html

And yet the bankers who created the mortgage timebomb walk free and keep their ill gotten gains whilst the taxpayer foots the bill.

£4.2 billion in fines..

no doubt, the bank will book that as profit and sell the debt to the ECB.

[Chris G]

Is this not idiotic and stupid to order someone to pay such an astronomical amount i.e. making an **** out of the law. This guy has obviously done what he did due to the perverse incentives where he worked and a lack of controls, I blame the bank much more than the trader. I'm not sure how bankrupting this guy benefits us all?

[newbie]

If SocGen's lawyer was an investment banker, he'd be getting paid a percentage of that £4.1Bn judgment as a fee today and sailing off into the sunset.

[RufflesTheGuineaPig]

If SocGen's lawyer was an investment banker, he'd be getting paid a percentage of that £4.1Bn judgment as a fee today and sailing off into the sunset.

As a lawyer, he may well still be getting a percentage.

It will be funny if it turns out to be a percentage of the award rather than of what is paid and the bank end up having to cough up another €500m!

Also, I'm not sure how French law works... does JK pay the bank directly or does the bank claim from the government who then chase JK?

[Injin]

As a lawyer, he may well still be getting a percentage.

It will be funny if it turns out to be a percentage of the award rather than of what is paid and the bank end up having to cough up another €500m!

Also, I'm not sure how French law works... does JK pay the bank directly or does the bank claim from the government who then chase JK?

I think the bank book it as "money coming in" for a month before he goes pop and then FRB it to the rafters.

[Agentimmo]

Kerviel could appeal on the grounds that his actions didn't have much long term impact on his employers, SG. Now making big profits and the traders getting record bonuses again. Jerome's mates should count their blessings they weren't hauled up alongside him. Maybe they could donate their bonuses for the next 3 years that he spends in prison and pay off his 4.9Billion euro fine. Might even have some spare euros to send him a bottle of 1959 Dom Perignon whilst he's behind bars.........