SocGen Ignored Signs of Foul Play: Kerviel's Lawyer

Societe Generale ignored early signs of alarm regarding Jerome Kerviel's trading, as long as he was bringing money to the bank, Guillaume Selnet, one of Kerviel's lawyers, told CNBC Europe on Thursday.


Moreover, according to Selnet, the bank had changed its stance a few days before Kerviel's bail hearing, acknowledging only then that he could have acted with accomplices.

Last week French media published a series of instant messages between Kerviel and a friend in which Kerviel was saying he was afraid he would go to prison.

"Jerome has never hidden anything in this respect," Selnet said.

"What is important here is that Societe Generale has had the evidence for five days since January 20. They never made the prosecution aware of what was going on and all of a sudden, on the eve of the hearing of Jerome's bail, they disclosed these elements one by one, time by time."

Contacted by CNBC Europe, Societe Generale refused to comment.

The French bank unveiled 4.9 billion euros of trading losses last month accusing Kerviel of fraud. It unwound 50 billion euros of futures bets taken out by Kerviel in steeply falling markets between January 21 and 23.

"They Chose to Ignore It"

Societe Generale has said Kerviel could hide his trades because he had worked in the bank's middle office, which keeps the records and processes transactions, and has computer expertise.

But his lawyers have disputed this and they said the bank had known about what was going on.

"We are accusing them (Societe Generale) of being complacent. They chose to ignore it," Selnet said. "Our belief is that, for this particular bank, it was never a matter of principle, it was a matter of money."

Kerviel did not make any personal profit out of the scheme, Selnet reiterated.

"He never made a dime for himself, he was like every other traders, like you or like me. He wanted to be successful … that was his only motivation," he said.

The lawyers launched an appeal to release Kerviel who, they said, cannot defend himself properly while in prison.

"Right now our only goal is to have Jerome released from prison," Selnet said, adding that the investigation could take years.

"In this case, the truth is on our side," he added. "Can anyone arguably pretend that a single trader, the youngest of his team, can invest twice the value of the bank in the market without anyone within the bank knowing about it?"

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