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, claiming it had been unaware of his high-risk trading. Kerviel, who maintained from the start that his hierarchy knew what he was doing, was tried in 2010 and handed a jail sentence for forgery, fraud and hacking, and was ordered to pay the bank, in damages, the huge sum it lost.
He appealed the ruling, but the sentence was confirmed at a subsequent trial in 2012. A further appeal hearing in 2014 upheld his jail sentence but, given the evidence that the Société Générale had committed faults that allowed Kerviel’s extravagant trading, quashed the damages he was previously ordered to pay the bank. The case for the damages was later heard on appeal last year, when the bank’s claim was definitively thrown out.
Police Commander Nathalie Le Roy (whose rank is equivalent to a British chief inspector), a member of the financial crime squad, was appointed in 2012 to lead an investigation into complaints lodged by Kerviel against the Société Générale for forgery and use of falsified documents, and for obtaining a ruling under false pretences. The complaints were subsequently thrown out by the Paris public prosecutor’s office, but after Kerviel lodged an appeal against that decision they became the subject of a judicial investigation led by Judge Roger Le Loire, an independent examining magistrate.
Le Roy had led the original police investigation launched in 2008 after the revelations of the bank’s losses incurred by Kerviel’s high-risk trading, when she concluded that Kerviel had acted alone. But in the course of her investigation in 2012, 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.
She subsequently denounced how the 2008 investigation had been steered by the Société Générale, with the bank imposing its own version of events, choosing who would reply to questions, reportedly placing pressure on witnesses, and also, during her 2012 investigation, refusing to hand over requested evidence.
She also denounced the handling of her investigation into Kerviel’s complaints against the bank by the public prosecutor’s office, which moved to close the case despite evidence she had uncovered supporting the former trader’s assertions.
Since then, Le Roy has been assigned to a post on detachment from the financial crime squad as an investigator with the French Financial Markets Authority (AMF). In 2015, she gave a statement to Judge Le Loire detailing her conclusions that the bank had covered up its responsibility in Kerviel’s trading losses. From that point on, Le Roy was ostracised by her hierarchy and has endured a campaign of denigration. She subsequently secretly recorded a conversation with a former member of the public prosecutor’s office, who spoke of her knowledge of, and outrage at, the campaign led against Le Roy.
Reacting to the revelation earlier this month that the public prosecutor’s office has now recommended that Kerviel’s three complaints lodged against the Société Générale – for subornation of a witness, for forgery and use of falsified documents, and for obtaining a ruling under false pretences – should be dismissed, Le Roy told Mediapart she was “not surprised” and that the move was “in line with the previous decisions” in the case.
Following the ruling by a Versailles appeal court last September, which definitively reduced to one million euros the 4.9 billion euros in damages originally awarded to the Société Générale against its former trader, and which was at the heart of Kerviel’s legal fightback against the bank, there now appears to be a haste to close the last of the cases in this legal marathon that began nine years ago.
Nathalie Le Roy has not yet had access to the details of the recommendations of tghe public prosecutor’s office to throw out Kerviel’s complaints. However, she has heard that her former superiors at the financial crime squad undermined her statement to Judge Le Loire in 2015, arguing that what she said was the opposite to the conclusions of her police reports when in charge of the case. “In 2008 yes, but it was afterwards, in 2012, that I realized that there had been dysfunctions,” she told Mediapart. “I told my hierarchy about this verbally. But I didn’t have time to write my report on the investigation. Two days before the appeal court verdict in 2012, I was asked to send the case file to the public prosecutor’s office, before I wrote up my conclusions.”
In her statement to Judge Le Loire in April 2015, 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.
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 de 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.
Since Nathalie Le Roy gave her statement, the public prosecutor’s office and her former superiors inside the police have endeavoured to discredit her evidence. In June 2015, two months after Le Roy gave her statement, de Leiris agreed to meet Le Roy at a Paris café when, unknown to the magistrate, Le Roy secretly taped their conversation. The police officer says that she did so as a “precaution”.
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. De Leiris cited one of the officers who referred to a stroke 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.”
Nathalie Le Roy has not yet had access to the details of the recommendation made this month by the public prosecutor’s office to throw out Kerviel’s complaint against the Société Générale, a move which was revealed by France Inter radio on January 10th. However, she has heard that her former superiors at the financial crime squad undermined her statement to Judge Le Loire in 2015, arguing that what she said was the opposite to the police reports she drew when in charge of the case. “In 2008 yes, but it was afterwards, in 2012, that I realized that there had been dysfunctions,” she said. “I told my hierarchy about this verbally. But I didn’t have time to write my report on the investigation. Two days before the appeal court verdict in 2012, I was asked to send the case file to the public prosecutor’s office, before I wrote up my conclusions.”
While not surprised by the decision to throw out Kerviel’s complaints, Nathalie Le Roy says she is “profoundly disappointed” by it and regrets that there was no investigation into the evidence she provided in her statement.
She queries the decision to dismiss Kerviel’s complaint against the Société Générale for “subornation of a witness”. Kerviel’s complaint centred on a payment the bank made to his former superior Eric Cordelle, head of the Société Générale’s Delta One trading desk, who testified against Kerviel at his trial in 2012, when he told the court that the bank knew nothing of the huge trading risks made by Kerviel. After the revelation, in January 2008, of Kerviel’s losses, Cordelle was sacked by the bank for inadequate professional conduct, and subsequently received a pay-off of 1.4 million euros. “This amount received [by Cordelle] appears disproportionate given the complaints the bank made against its employee,” said Le Roy.
In 2008, Cordelle launched legal action against the bank over his dismissal at a labour tribunal, but he withdrew the challenge in February 2013, just months after testifying in the bank’s favour against Kerviel during the latter’s appeal trial in 2012, when he was again found guilty of “rogue” trading, raising the suspicion of collusion between Cordelle and the Société Générale.
But Judge Roger Le Loire, in charge of the judicial investigation into Kerviel’s complaint for subornation of Cordelle, apparently saw no evidence of collusion, despite Le Roy’s account to him, detailed in her statement, of a conversation she had at the end of the 2012 appeal trial with Geneviève Carriou, a senior member of the the Société Générale’s Human Resources department.
“During the deliberation, in the corridors, I witnessed a conversation with a woman who presented herself as being still in the Société Générale’s Human Resources [department], who therefore could not manifest herself, and who said that she was appalled that Jérôme Kerviel was made the fall guy,” Le Roy said in her statement to the judge. “Not knowing how to take her comments, I presented myself to her as the Commander of the financial crime squad […] While being aware of my position, she went even further by explaining to me that in January 2008, after the events were discovered, Frédéric Oudea, who was at the time financial director, ‘sequestrated’ a certain number of managers in order to make them sign an undertaking of confidentiality regarding all that they could have learnt about, and that they even undertake not to talk about it to their spouses. From what she said to me, most of the people signed that undertaking.”
Le Roy gave the woman her phone number. “She called me,” Le Roy told the judge. “We met up and she told me she was reflecting on whether she was ready to give a statement, but anonymously. I never heard anything further.”
Geneviève Carriou was subsequently questioned by Le Loire, when she denied Le Roy’s account of what she said. The judge did not pursue the issue, despite the existence of other witnesses to the conversation. One of them, questioned by Mediapart, gave an identical account of Le Roy’s statement about the discussion.
Judge Le Loire also never requested that Le Roy hand over the full recording she made of her meeting in 2015 with former deputy public prosecutor Chantal de Leiris. Meanwhile, there has been no independent audit to calculate the losses incurred by the Société Générale by Kerviel’s actions, leaving the figures claimed by the bank itself as the only indication.
As for how much the events have cost the public purse, the French finance ministry has refused to reveal any details of the tax breaks that were granted to the bank in the wake of the losses, and which in all logic should have been refunded by the bank after the ruling of the Versailles appeal court last year.
Nathalie Le Roy is today paying the consequences of becoming a whistleblower. Like many others, she has been made a pariah whose life has been profoundly shaken up. She says many of her friends and acquaintances cannot understand why she decided to take up her battle. Since her investigations into the Kerviel case, Le Roy has for several years worked on secondment with the French Financial Markets Authority (AMF), and after giving her statement in 2015 her superiors at the financial crime squad barred her from entering its head offices in the Rue du Château-des-Rentiers, in the 13th arrondissement of Paris. At the AMF, she has been removed from active involvement in investigations.
Le Roy told Mediapart that she has no regrets over the stand she has taken. “Perhaps I would do certain things differently,” she said, “but yes, I would do it again.”
As a police officer, she is an employee of the interior ministry, which has never made any attempt to contact her about her situation and the consequences of her testimony. Nor has the finance ministry, despite the fact that during last year’s parliamentary debates over a new anti-corruption and transparency law, adopted in September, economy and finance minister Michel Sapin argued in eloquent terms for the need to create a special legal status to protect whistleblowers. Sapin said then that it was necessary to offer protection to whistleblowers who had taken significant personal risks in order to serve the public interest, which would surely apply to Nathalie Le Roy.
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The French version of this article can be found here.
English version by Graham Tearse