In January 2008, French bank Société Générale announced it had lost 4.9 billion euros through the reckless actions of one of its traders, Jérôme Kerviel who, it claimed, secretly gambled fortunes on high risk trades on his own and without the knowledge of his superiors.
As soon as the losses were announced, the bank filed a complaint against Kerviel and a unit of the French police financial crime squad (la brigade financière), headed by Commander Nathalie Le Roy, was immediately assigned to the case. By the end of her investigation, Le Roy was convinced that Kerviel had run up the losses in operations that he hid from his superiors.
At the end of the judicial investigation based largely on the findings of Le Roy and her colleagues, Kerviel was charged with forgery, breach of trust and fraudulent use of the bank’s computer systems. In 2010, at the end of his trial in Paris, he was found guilty and sentenced to five years in prison – two suspended. He was also ordered to pay the Société Générale the huge sum it claimed to have lost on account of his trading.
Enlargement : Illustration 1
Kerviel, who has admitted his high-risk trading, has always maintained that the bank knew what he was doing. He lodged an appeal against his conviction, but the 2010 sentence was upheld in a ruling in 2012. After a subsequent and final appeal, the jail sentence was again upheld in 2014 although the amount of the damages - 4.9 billion euros - awarded to the bank was overturned. Kerviel finally served just under five months of his jail sentence when he was released in September 2014 on condition of wearing an electronic tag and with restrictions on his movements.
In 2012, Commander Le Roy was appointed to lead a new police investigation into official complaints filed by Kerviel against the Société Générale for forgery and use of falsified documents, and for obtaining a ruling under false pretences. In the course of her new investigation, Le Roy radically changed her opinion about the case, after uncovering disturbing indications that the Société Générale had covered up evidence to maintain the image of Kerviel as a ‘rogue trader’ who acted behind the back of his colleagues and superiors
The complaints lodged by Kerviel – and investigated by Le Roy - were subsequently thrown out by the public prosecutor’s office, which was responsible for deciding whether a preliminary investigation should be opened. But another legal appeal by Kerviel eventually led to the opening of a judicial investigation headed by Paris Judge Roger Le Loire, an independent examining magistrate.
The French public prosecutor’s office, unlike the judiciary, is accountable to the political powers.
In April last year, the judge summoned Le Roy for questioning about her investigation in 2012. She met with Judge Le Loire one month after she had left the financial crime squad for a position with another investigation unit (the identity of which is withheld here on her request).
In her statement to the judge, Le Roy unequivocally told him that she believed she had been “used” by the the Société Générale in her original 2008 investigation, and that during her 2012 enquiries the bank held back key evidence she had requested. She detailed witness accounts of how Kerviel’s superiors were already made aware in 2007 of his extravagant trades, of allegations that Société Générale staff were made to sign gagging agreements preventing them from talking about the case, and underlined that the losses that the bank claimed to have incurred from Kerviel’s actions were never independently verified.
Enlargement : Illustration 2
Nathalie Le Roy’s testimony was revealed by Mediapart one month later, on May 17th 2015. Following that report (see here), Le Roy soon became aware she was the object of a destabilization campaign. That would be detailed to her by a magistrate from the public prosecutor’s office in a taped conversation revealed here by Mediapart.
Meanwhile, Le Roy, who Mediapart has learnt from police sources was subsequently unofficially barred from visiting the financial crime squad offices, where she had worked for more than 20 years, began receiving threatening calls on her mobile phone and home landline, which she says warned her that “You’re going to have troubles”.
During her 2012 investigations into the Kerviel case, Le Roy was in professional contact with Chantal de Leiris, who was then a deputy public prosecutor within the Paris public prosecutor’s office. It was Leiris who, on behalf of the public prosecutor’s office, dismissed the complaints filed by Kerviel against the Société Générale for forgery and use of falsified documents.
However, on several occasions Leiris had told Le Roy of her doubts about the case. In June 2015, two months after Le Roy’s statement to Judge Roger Le Loire, Leiris agreed to meet Le Roy at a Paris café, when Leiris made clear to Le Roy she had buckled to pressure from her heirarchy.
The two women met on June 17th 2015 when, unknown to the magistrate, Le Roy secretly taped their conversation. The police officer says that she did so as a “precaution”. She had, when the two women met, become ostracised and discredited by her superiors, and wanted to know why she was being discredited and who was behind it.
Le Roy says she gave a copy of the taped conversation to Kerviel’s lawyer, David Koubbi, as a protection against what might later befall her, and for him to use “for any appropriate purpose”. Until now, its existence has been kept secret.
Her decision to allow the publication of extracts of the transcript here by Mediapart, in association with French daily 20 Minutes, was prompted by comments made by representatives of the Société Générale during a current affairs programme, Complément d’enquête, broadcast last Thursday on TV channel France 2, in which she also appeared in a pre-recorded interview.
“When I heard during the programme the manner in which the officials of the Société Générale discredited my statement [editor’s note: to Judge Le Loire], and all the other witnesses, I told myself that things would not stop there, that they would continue the destabilization campaign against me,” she told Mediapart. “My hierarchy, who for 23 years appreciated my work, places a discredit on my work, my investigation, my person, since my testimony [to Judge Le Loire]. The investigation is not advancing. I am all alone.”
Kerviel’s lawyer told Mediapart: “To whom can I denounce the malfunctions in this case, if it’s not to the press? The public prosecutor’s office? But this account [the recording] confirms what we have suspected for a long time, that there exists serious malfunctions within the prosecutor’s office. Even at the Elysée [French presidential office], I was advised in 2014 [when Jérôme Kerviel was jailed] that if the malfunctions that I denounced were real they should be made known to the press. I’m following that advice.”
Importantly, the timing of their decision to release the contents of the recording coincided with the appearance on Monday January 18th of Kerviel and Koubbi before a panel of Paris appeals court judges, the Cour de Révision, who are examining the former trader’s request for a retrial of the charges which led to his original conviction in 2010. The Cour de Révision, now Kerviel’s ultimate recourse in France to attempt to overturn the 2010 verdict, will render a decision as of March 21st.
Mediapart has had access to the whole of the taped conversation, which lasts just more than 40 minutes. Only those extracts which are directly pertinent to the Kerviel case are cited here.
During the meeting on June 17th last year, Chantal de Leiris told Le Roy that on Monday May 18th, the day after Mediapart’s revelations of her statement to the judge, two ranking officers from the financial crime squad held a meeting with staff at the Paris public prosecutor’s office to discuss how to counter her claims. Leiris cited one of the officers who referred to an illness Le Roy had suffered. “In any case, since her stroke, she has memory losses,” she quoted him as saying.
“I was scandalised,” de Leiris said of the meeting. “I found it vile, but vile, that you were made out to be a person who no longer has their memory and who talks rubbish.”
Mediapart contacted the Paris public prosecutor’s office for confirmation that the May 18th 2015 meeting Leiris referred to did take place, and whether such meetings were normal practice. A spokeswoman for the prosecutor’s office declined to comment. “I am incapable of answering you,” she said (her overall response to the contents of the recording is published at the end of this article on page two).
'It’s true that I’ve always obeyed'
Enlargement : Illustration 3
In her statement given last April to Judge Le Loire, Nathalie Le Roy had spoken of how she came to believe she had been “used” by the Société Générale during her initial investigations in 2008. “It’s true what you say in the first case that broke, it’s that you were entirely manipulated by the Société Générale,” said Chantal de Leiris during her meeting with Le Roy on June 17th last year. The former deputy Paris public prosecutor, now assigned to the Paris district court, told Le Roy that the public prosecutor’s office was informed that the police officer’s poor grasp of the world of banking and trading meant she was uncertain where to look for key evidence.
“But anyhow,” Leiris told her, “in this case there are indeed things that aren’t normal. When you talk about it, people who are a bit in the financial world laugh, knowing very well that the Société Générale knew [of Kerviel’s risky trading]".
Concerning the public prosecutor’s decision in 2012 to throw out Kerviel’s complaints for forgery and use of falsified documents, Leiris said it was Michel Maes, the then-head of the financial affairs section of the public prosecutor’s office, who placed pressure upon her. “It was above all Michel Maes,” she told Le Roy. “Never endingly he told me ‘you’re not going to place at odds, at fault, the Société Générale. It’s been decided [in 2010] in court, you haven’t to go back on it’.”
Leiris said she followed orders to dismiss the complaints lodged by Kerviel. “It’s true that me, I’ve always obeyed,” she told Le Roy. “[...] Me, I endlessly said ‘yes’. But they well know that I wasn’t in favour of all that.”
Contacted by Mediapart, a spokeswoman for the Paris public prosecutor’s office said no immediate action was being considered over the taped conversation. “At this stage it is impossible to make the slightest comment, given that we are not aware of the contents of the recording,” she said. “We note, all the same, the quite deceptive nature of the process, which consists of recording a person without them knowing.”
Jean Veil, one of the Société Générale’s principal lawyers, also refused to comment on the comments by Chantal de Leiris because of what he said were “insufficient elements about this account”.
In an interview with 20 Minutes, Nathalie Le Roy was asked if she was concerned that she may have placed Chantal de Leiris in difficulty. Le Roy said she had long hesitated about revealing the existence of the recording. “But, for me, it’s a way of recognising the courage she had in making the revelations to me, knowing that she was very aware of my position,” Le Roy said. “Against the risk of losing her confidence, I give privilege to the truth and the reasons which one day led me to enter the ranks of the police. I want the justice system to be well administrated.”
Meanwhile, the case of Nathalie Le Roy highlights the sore lack of legislation in France to protect whistleblowers, which the government has promised but not enacted. Following Mediapart’s revelations of her April 2015 statement to Judge Roger Le Loire, a cross-party group of six French Members of Parliament (MPs) appealed to the government to guarantee the protection of Le Roy, who they described as “a key witness”. One of the MPs, Georges Fenech , a member of the conservative Les Républicains party and a former examining magistrate, commented at the time: “All that won’t cause pleasure for the judges, the banks, our parties. In this affair, there are only knocks waiting to be taken. But we demand justice. ”
-------------------------
- The French version of this article can be found here.
English version by Graham Tearse