French judges said Jerome Kerviel must pay Société Générale 1 million euros ($1.1 million), a fraction of the initial 4.9 billion-euro trading loss he was accused of causing more than eight years ago, reports Bloomberg.
Société Générale’s “multiple faults” mean the bank “had a major and decisive role” in allowing the incident, one of the most famous cases of rogue trading in financial history, according to a three-judge panel in Versailles led by Patrick Wyon.
The 39-year-old former trader - seen as a folk hero by some - has been trying for years to shift blame for the loss onto France’s second-largest bank. While a 2014 criminal verdict found him solely responsible for the loss, an order requiring him to repay the bank was overturned at the same time.
“Whatever the craftiness and determination of the one who committed the acts, or even the sophistication of the methods deployed, such a great damage would never have been reached without the patchy nature of Société Générale’s control systems, which created a high degree of vulnerability," according to the 29-page ruling.
The Paris-based firm declined to immediately comment on the verdict, which bank attorney Jean Veil called “satisfactory.” He said it was an "intelligent, serene decision that can be understood by the French people."
Kerviel’s lawyer, David Koubbi, said the ruling should put the public focus on the bank’s actions instead of those of his client. Société Générale got a 2.2 billion-euro tax break from French authorities because of the trading loss.
“Today Société Générale should get its checkbook out and sign a 2.2 billion-euro check" to the French state, he said. “The climax of this trial and this ruling is the absolute necessity of paying back the 2.2 billion euros of public money.”
Kerviel had amassed 50 billion euros in positions in European stock futures using fake hedges and false documents. The French bank unwound the positions during three days in January 2008 after uncovering Kerviel’s unauthorized trades. Kerviel’s lawyers have asked for a new independent estimate of the loss.
“It seems a more rational decision than in the past,” said Eric Vernier, a researcher specializing on tax and finance at the French Institute for International and Strategic Affairs. “It’s logical to recognize a fault on Kerviel’s side and to punish it” but it’s also “highly unlikely” that the bank’s control systems didn’t detect his actions for such a long period, he said.
Kerviel served five months of his three-year sentence for abusing Société Générale’s trust. He’s tried to cast himself as a victim, maintaining that his superiors looked the other way so long as he was making money.
His legal luck began to change this year.
In the space of two weeks in June, an employment tribunal awarded Kerviel about half a million dollars for unfair dismissal, while in another courtroom a prosecutor criticized Société Générale for “multiple, long-standing” failings.
Casting himself as a victim of a corrupt financial system has won Kerviel support over the years from people with backgrounds as varied as priests and left-wing politicians. In the early days, he inspired a comic book and fan club and featured on T-shirts. Earlier this summer, “The Outsider,” a movie dramatizing his account of the events, hit French cinemas to mostly positive reviews.