Jerome Kerviel: Societe Generale knew of fake trades in 2005

10 June 2010

Jerome Kerviel, the former Societe Generale trader on trial for abuse of trust, computer hacking and faking documents, has told a French court that his firm was aware of what he was doing.

His actions eventually led to a €4.9 billion ($5.9 billion) loss for the bank, but Kerviel said he had "hid nothing" from Societe Generale when he first began fabricating hedging trades in 2005, reports Bloomberg.

He stated that he was also allowed to exceed daily trading limits "70 per cent of the time".

But Jean-Pierre Mustier, the former head of Societe Generale's corporate and investment banking division, stated that he did not know who Kerviel was until he was arrested and was unaware that the unauthorized trades were occurring.

"He can't say that management knew," Mr Mustier said. "Jerome Kerviel is the trader who lost the most money in the world."

Mr Kerviel's actions were discovered in early 2008 and later that year Societe Generale was fined €4 million for allowing the trading losses to occur.

By Tony Aynsley

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