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The junior trader who left Société Générale battling to retain its
independence after he lost €4.9 billion (£3.7 billion) was taken into
custody last night after a French court was told that he could tamper with
evidence if he were allowed to walk free.
Jérôme Kerviel, 31, was remanded in jail by the Paris Appeal Court after
prosecutors challenged a decision to grant him bail. The hearing came as the
inquiry into the scandal broadened. An employee of Newedge, a firm of
brokers owned in part by Société Générale, was questioned by French police
after they discovered an e-mail from him to Mr Kerviel that read: “You
haven’t done anything illegal in terms of the law.”
Moussa Bakir, 32, was taken into custody on Thursday and detained overnight.
Communications between Mr Bakir and Mr Kerviel were uncovered by SocGen’s
own investigators and passed on to detectives this week.
The Société Générale trader is under investigation after it emerged that he
had taken unauthorised bets totalling €50 billion on a falling stock market.
The biggest rogue trading scandal in history has plunged the bank into crisis,
forcing Daniel Bouton, its embattled chairman, to seek a €5.5 billion
capital increase as he strives to fend off takeover bids.
Mr Kerviel, who is accused of falsifying documents to cover his positions,
faces charges of forgery, breach of trust and tampering with an IT system.
The bank also handed over to investigators Mr Kerviel’s mobile telephone
bills, which are understood to have amounted to about €1,000 a month. The
bank had backed Mr Kerviel’s assertion that he had acted alone. Yesterday,
however, it appeared to change its stance after the detention of Mr Bakir.
“The inquiry seems to be at a turning point,” Jean Veil, a Société Générale
lawyer, said. Mr Bakir worked for Fimat, SocGen’s wholly owned broking
business, which merged with Calyon Financial, a division of Crédit Agricole,
to form Newedge in January.
According to Société Générale, Mr Kerviel often used Fimat to process his
trades, some of which were cleared by the broker’s office in London.
A source at the bank said that managers “could not understand” why Fimat had
failed to alert the group to the extent of the trader’s dealing. Fimat’s
offices were searched by police on Thursday, a judicial source said.
The legal moves continue apace with the board of Société Générale expected to
meet this weekend to finalise its rights issue, which could be initiated
next week.
A takeover battle for the bank is expected to break out after the capital
increase, with BNP Paribas, its large domestic rival, likely to be in pole
position to acquire SocGen.
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SoGen's officials were desperate to get Kerviel jailed, where he could either have an "accident", or be coerced, beaten, deprived of sleep etc. until he agrees to change his story and take all the blame on himself. They are all being indicted for a money laundering scandal involving hundreds of millions of Euros being trafficked out of and into Israel. Many other banks are involved as well. The incriminating telephone call, involved one sentence in one conversation, "You haven't committed any crime."
France under Sarko has become a completely "lawless town with no Marshal". The entire business community is openly criminal, and are profiteering in every sector. The French Government will do anything to protect their big businessmen and women because Sarkozy seriously BELIEVES that business crimes by rich people of his class should always be forgiven. A frenetic character himself, I foresee that he will soon have a nervous breakdown. His friends will then lose their protection.
victor compton, Cherbourg, France