SocGen Trader Kerviel Leaves Jail Pending Probe


Jerome Kerviel, the Frenchman blamed by his company for the world's biggest rogue trading scandal, left jail on Tuesday after winning a legal battle against detention.

Kerviel, 31, walked free from the Sante prison in Paris after five weeks in custody while investigators continue to probe heavy losses at French bank Societe Generale.

Looking relaxed in a dark suit and pink shirt with no tie, the former trader stepped into a Paris side street accompanied by his lawyer Elisabeth Meyer.

Kerviel did not speak to reporters but paused briefly for cameras and was driven off in a small car.

Under the terms of his conditional release, there are strict limits on his movements and contacts.

SocGen unveiled 4.9 billion euros ($7.64 billion) of trading losses on Jan. 24 and blamed them on unauthorised stock market deals carried out by Kerviel, a junior trader at the bank.

Kerviel is under formal investigation for breach of trust, computer abuse and falsification.

He has acknowledged trading without approval but has told police his supervisors must have known of his activities.

Judges placed him under formal investigation shortly after the scandal broke but allowed him to remain free under judicial supervision, a system which resembles bail.

Prosecutors appealed and he was sent to the Sante, a prison often used for high-profile detainees, on Feb. 8. 

That decision was reversed earlier on Tuesday and prosecutors said that this time they would not appeal.

"Jerome is very happy, I don't think he expected it," Meyer said after visiting him in prison following the court session but before he was actually freed.

As hours ticked by following the court decision to release him, Kerviel's spokesman Christophe Reille fielded impatient questions from journalists and photographers.

"I doubt he wants to stay inside in the warm. I think it's fair to say if he could come out he would," he said.

Kerviel's dizzying stock market bets totalling 50 billion euros under the noses of SocGen have spawned a handful of hastily written books about the photogenic former trader.

For some, Kerviel's trades symbolised the folly of modern markets, whose recent collapse exposed his risky trades.

Among others, particularly in Internet chatrooms, Kerviel has been lauded as an anti-establishment folk hero. His release was broadcast on live television.

Kerviel is barred from entering a trading room or an exchange, may not engage in any activities related to financial markets, and has to present himself weekly at a police station.

He cannot leave the Ile-de-France central French region that includes Paris without permission and must surrender his passport and identity card. He has to inform the investigating magistrates each month where he is staying.

He cannot meet witnesses or other parties involved in the case. His lawyer reiterated Kerviel acted alone.

Societe Generale's lawyer, Jean Veil, said he was pleased with the strict controls under which Kerviel was placed.

"The Societe Generale is a victim, and I believe victims should not cry out for vengeance but to obtain reparation of the damages," Veil said.

An internal SocGen report said Kerviel had acted alone but said the bank's control systems were not built to prevent fraud.

Weakened by the losses, SocGen is seen as a takeover target with arch rival BNP Paribas trying to drum up political support for a takeover bid. In 1999, BNP narrowly failed to buy its rival.

The bank was already facing losses from the subprime mortgage crisis in the United States that has claimed some big-name victims, most recently Bear Stearns.

Bank of France Governor Christian Noyer criticised SocGen's risk-control systems and French President Nicolas Sarkozy has made clear he thinks SocGen Chairman Daniel Bouton should quit. 

Although he offered to resign when the losses first emerged, Bouton has said he has a mandate from the board to keep his job and continue with the bank's strategy to remain independent.