PARIS, June 7 (UPI) — The man who nearly destroyed a French multinational financial firm six years ago with a series of rogue billion-dollar trades and fraud was terminated without “real or serious cause,” a labor court in Paris decided Tuesday.
Jérôme Kerviel was convicted in 2010 on multiple criminal counts stemming from various unauthorized trades in 2008 that cost Société Générale SA billions, nearly pushing the firm into extinction. The exact dollar amount the bank lost is unknown, but news media have reported the figure anywhere between $5.6 billion (€4.9B) and $7.2 billion.
Société Générale called Kerviel a “rogue trader” and fired him for exceeding his authority. The bank said Kerviel made numerous fraudulent moves in 2007 and 2008, and then committed more fraud to cover it up when questioned about them.
Kerviel, who was charged with fraud and forgery, was convicted and sentenced in October 2010 and ordered to repay billions to Société Générale. His three-year sentence, which ultimately turned into a four-month jail stay, was upheld on appeal. He was released in 2014 and placed on probation for the remainder of his three-year term.
Since his sentencing, the 39-year-old has been appealing his punishment and even filed a wrongful termination lawsuit against the company — to the incredulity of most observers.
Kerviel, who is now barred for life from working in the financial sector, won his first legal battle in 2014, when a French court upheld his prison term — but threw out the order for restitution.
His second legal victory came Tuesday, when a Paris court determined that Société Générale didn’t have sufficient cause to fire him.
“[The bank] could not pretend it hadn’t long been aware of the unauthorized trades conducted by Mr. Kerviel,” the judges wrote in their ruling. “The bank therefore can’t argue that Mr. Kerviel was at fault when it ‘previously tolerated similar practices.’”
Additionally, the court ordered the bank to actually pay Kerviel $340,000 in 2007 bonus money and another $170,000 for damages due to his “unfair dismissal.”
Kerviel has claimed from the start that his managers at the bank actually encouraged the risky trades, as long as they were profitable.
“This is a huge victory,” Kerviel attorney David Koubbi said. “It is recognizing for the very first time that Société Générale knew everything about his activities, which is a very big thing.”
Société Générale responded to the ruling with shock, calling it “incomprehensible.”
“It is counter to the facts that have been judged. We will appeal against this decision,” the French bank said.
Kerviel could still be ordered to repay billions to the bank. France’s Court of Cassation ordered a new trial to determine how much the former trader should pay back. Those proceedings begin next week.
COMMENTS
Please let us know if you're having issues with commenting.