Interview with Jerome Kerviel

Discussion in 'Wall St. News' started by buzzy2, Feb 7, 2008.

  1. I can't find the full transcript, even in french.

    French trader refuses to be 'scapegoat' for SocGen losses
    2 days ago

    PARIS (AFP) — The dealer blamed for a seven-billion dollar rogue trader loss at French bank Societe Generale told AFP Tuesday he had got "a bit carried away," but refused to be made a scapegoat for the whole scandal.

    Jerome Kerviel, 31, who was propelled to worldwide notoriety overnight by his role in the affair, agreed to meet AFP at his lawyer's Paris offices for his first interview since the scandal broke late last month.

    "I was designated (as solely responsible) by Societe Generale. I accept my share of responsibility but I will not be made a scapegoat for Societe Generale," Kerviel said.

    Wearing jeans and a white checkered shirt, the young trader appeared smiling and composed during the 15-minute interview.

    Kerviel said he "never thought of running away" from the law, after the bank blamed him for causing losses of 4.8 billion euros (7.1 billion dollars), revealed to the world on January 24.

    Societe Generale accuses Kerviel of placing more than 50 billion euros in unauthorised futures trades, circumventing internal controls with stolen computer access codes and fictitious documents.

    Kerviel was charged last week with breach of trust, using false documents and unauthorised computer access, although judges did not approve the more serious charge of fraud.

    Kerviel told his story in shy, gentle tones, his lawyer Elisabeth Meyer at his side.

    "I never had any personal ambition in this affair. The aim was to earn money for the bank," he said.

    "You lose your sense of the sums involved when you are in this kind of work. It's disembodied. You get a bit carried away."

    Kerviel said he had "yet to fully grasp" the implications of the affair, which has sparked international calls for tighter regulation of financial markets -- and left France's third bank a likely takeover target.

    He said he was following the case day by day "in the papers and on the Internet" -- and that "there would be a lot to say. A lot of things are twisted in the press."

    In particular, Kerviel dismissed reports casting him as psychologically unstable: "I am neither suicidal nor depressive," he said with a smile.

    He said that "everything went well" during his questioning by French investigators last week: "I said exactly what I had to say."

    But the trader refused to go further into the details of the affair, saying he was "saving his statements for the judges"

    Kerviel admitted during questioning to falsifying company e-mails to cover his tracks after he started making unauthorised deals in 2005, according to leaked records of his deposition.

    But he also told investigators the bank must have known what he was doing because of the profits he had generated previously, and suggested his bosses turned a blind eye as long as he was not in the red.

    According to a judicial source, Kerviel was questioned again for eight hours on Monday by judges who asked him about his working conditions at the Societe Generale trading desk, which he joined in 2005.

    Prosecutors have appealed the judges' decision to release him from custody under judicial supervision, with a hearing set for Friday, which Kerviel said he would attend.

    Kerviel said he was staying with friends in the Paris region -- far from his flat in the chic Paris suburb of Neuilly -- after having spent a weekend in the countryside.

    The trader said he had been in limited contact with his family, who come from the Breton village of Pont l'Abbe, saying he wanted to "protect them from the media," which he described as "really oppressive".

    Denying claims that he had been placed under round-the-clock police protection, Kerviel left the interview alone, on foot, blending into the anonymous Paris crowd.
  2. SocGen management and personnel called 'hypocrites', 'incompetent' and 'stupid'.

    Former SocGen inspector tells of trading room anarchy
    23 hours ago

    PARIS (AFP) — Profit-crazed traders, controllers out of their depth and executives who turn a blind eye: a former inspector at Societe Generale paints a damning picture of trading room anarchy at the scandal-hit bank.

    Maxime Legrand worked as an inspector of trading operations at Societe Generale from 2001 to 2004, leaving a year before rogue trader Jerome Kerviel joined its trading desk in Paris.

    Reporting directly to Chairman Daniel Bouton, he was part of a team that carried out risk assessment spot checks, in addition to the regular controls conducted by the so-called back office.

    "The 70 to 100 risk hunters are a little bit like 'his' own team," Legrand told AFP.

    Once a year, Bouton -- who is in the firing line over the 4.8-billion-euro (7.0-billion-dollar) losses the bank has blamed on Kerviel -- would summon the inspectors for a risk assessment review, Legrand said.

    "Every year he used to give us a dressing-down, saying that each time there had been a risk we had not spotted it. He knows he has an inspections body that doesn't see risks, and he does nothing about it."

    "Since inspectors do not have enough power in the bank, we are not given the time we need, or the means to check things out," he said.

    "We pretend to have an inspection just to please the banking commission," Legrand charged. "That's where the hypocrisy lies with Societe Generale's management: everyone knows about all of this."

    A spokeswoman for Societe Generale, asked to comment on the allegations, said: "The remarks made by Maxime Legrand are defamatory and his motives are of a personal nature."

    Societe Generale accuses Kerviel of circumventing internal controls with stolen computer access codes and fictitious documents, to place more than 50 billion euros in unauthorised futures trades.

    But in an interview with AFP on Tuesday, his first since the bank revealed its losses on January 24, Kerviel said he was only partly to blame for the bank's losses.

    "I accept my share of responsibility but I will not be made a scapegoat for Societe Generale," said the trader, who has been charged with breach of trust, using false documents and unauthorised computer access.

    The trader has suggested his bosses turned a blind eye to his rogue dealing as long as he was turning a profit.

    "Traders are pushed to make a lot of money, so there is a very short-termist culture ... where they don't want to be bothered by inspectors and controllers," Legrand said.

    "There are quite certainly a number of traders who did not follow risk control instructions and who went unpunished even when their offences were discovered, because they were earning money for the bank," he said.

    According to Legrand, the problem stemmed from the calibre of recruits: the typical bank inspector at Societe Generale, he says, was "fresh out of school" and "didn't know much about traders."

    "The guys just aren't up to the job," he claimed. "I, personally, didn't have the skills to detect exactly what risks there could be."

    "Working in a trading room is a very specialised skill... Any trader will tell you that (inspectors) sometimes do a pretty approximative job," said Legrand, who is currently working on a doctorate in economics.

    "When I was an inspector, the old traders would almost throw out by the seat of their pants inspection chiefs with five or six months' experience, saying: 'Come back when you have something intelligent to ask me.'"

    Legrand, who left the bank to work as an adviser to the Paris regional council, insists he has "no animosity towards Societe Generale."

    But he said, "I had had enough of seeing that inspection reports served no purpose except to be filed away by the banking commission."

    He claimed similar problems applied to the auditors charged with certifying the company's accounts.

    "The guys are not skilled enough. And the job is not always given to the brightest sparks," he said.
  3. Mvic


    Someone should kick that little snot's ass. To create that big of a loss and not to show some humility is astounding. The arrogant prick still thinks he is the shit :D , no limits to human delusion I see.

    And he says he did it all for the bank and not for any personal ambition, lol, what a joker.
  4. After loss, now SocGen faces large tax bill.

    SocGen says they 'didn't notice' Kerviel had produced 1.4 billion euros in profit that's why they didn't pay tax. :D :D :D :D

    Tax twist in the trading scandal
    Société Générale may face a tax hit after it was discovered Jérôme Kerviel booked a large gain for the bank.

    David Gauthier-Villars, Wall Street Journal
    07 Feb 2008 04:43

    PARIS -- Société Générale says it lost €4.9 billion ($7.17 billion) at the hands of 31-year-old trader Jérôme Kerviel. Now, the embattled French bank could face another financial hit -- this time from the tax man.

    As they pore over the trades, financial books and mobile-phone records of Mr. Kerviel, Société Générale officials have discovered that the trader booked a real gain for the bank of €1.4 billion by the end of last year, according to people close to the bank.

    That profit now "is subject to corporate tax," according to one person close to the bank. "We will argue against it, but fiscal authorities will want their share," this person said.

    A spokeswoman for the bank yesterday declined to comment.

    A spokeswoman for France's Finance Ministry said discussions between fiscal authorities and the bank were confidential.

    When it announced the world's biggest trading loss on Jan. 24, Société Générale said that Mr. Kerviel for several months had engaged in risky and fraudulent trading that at one point had left the bank exposed by €50 billion. The bank at that time said that Mr. Kerviel's trading positions had fluctuated and that as of late last year, his portfolio showed a "virtual" gain of €1.4 billion.

    The bank said it hadn't noticed the gain because the trader had hidden it by creating a set of fake positions that generated a €1.4 billion loss.

    Now, however, officials have discovered that as of the end of last year, Mr. Kerviel had unwound almost all of his trading positions -- and in fact had locked in a real gain of €1.4 billion for the bank, according to people close to the institution.

    The discovery doesn't alter the bank's reported €4.9 billion net loss announced three weeks ago. However, the realization that Société Générale was sitting on a €1.4 billion profit -- enough to offset subsequent write-downs the bank announced for its exposure to U.S. subprime mortgages -- and didn't notice is likely to raise further questions about the bank's internal control systems.

    Already, an internal bank committee, French prosecutors and the French Finance Ministry have been trying to figure out how Mr. Kerviel could engage in his risky trades for so long without being detected.

    On Tuesday, when Bank of France Governor Christian Noyer was asked by a parliamentary committee if he understood how Mr. Kerviel had managed to dodge Société Générale controls, he said: "Frankly, I don't get it."

    Mr. Kerviel, who is under investigation in a criminal probe, has told prosecutors during questioning that his supervisors knew he was engaging in high-risk trades but that they "closed an eye" while he was making money for the bank, according to transcripts of the questioning. Société Générale says it first learned about Mr. Kerviel's risky trading on Jan. 18.

    By then, Mr. Kerviel's luck had shifted. In January, the trader launched himself in more adventurous trades, betting €50 billion that European stock indexes would rebound, according to Mr. Kerviel's and the bank's accounts. When stock markets collapsed, the trader began to lose.

    At the stock markets' close on Friday, Jan. 18, he had racked up losses of €2.7 billion, according to the people close to the bank. The following Monday, bank officials assigned a single trader to unwind all of Mr. Kerviel's positions. By the time they finished, the loss had climbed to €6.3 billion, these people said. They added that the €4.9 billion loss unveiled on Jan. 24 is a net loss that factors in Mr. Kerviel's €1.4 billion gain in December.

    The extra tax that Société Générale may have to pay on the €1.4 billion gain booked in 2007 will be more than offset, although at a later date, by tax breaks on the €6.3 billion loss that was recorded last month.

    New information on Mr. Kerviel's trading positions is emerging just as the bank is trying to wrap up work on a €5.5 billion capital increase aimed at shoring up its finances.
  5. Actually, we don't know what would have happened if the position hadn't been closed in such an incompetent manner by SocGen higher ups. Remember there was a ST bottom right after the idiots sold the position.

    I still can't say if Kerviel is a moron using a martingale system, or if he has some kind of edge with huge balls needed to put on such large positions and ride the volatility. Maybe he had a good position that was closed too early by wimpy managers. I don't know.
  6. Mvic


    One thing we do know, any trader who risks the net worth of the institution he trades for has no business thinking he is anything better than a gambler with OPM. Yes they unwound the trade badly but it was a trade that should never have been made in the first place in that magnitude.

    Just because someone keeps doubling down and has virtually unlmited funds doesn't make them a good trader, it makes them lucky until they aren't. This guy freely admits he was playing with monopoly money and had no discipline, that is gambling pure and simple. How many will lose their jobs now due to this guys gambling? He is awfully cavalier about the whole thing.
  7. i'm just waiting for the book to come out at my local library so that i could read the insider scoop of it. probably going to be a couple years now.
  8. forget the book! Ge t the movie, it will be filled with SEX and MoNEY!:eek: