A Paris judge has filed preliminary charges against a trader suspected of losing more than €600m in complex derivative trades at French mutual bank Caisse d’Epargne.
A French judicial official said Boris Picano-Nacci was placed under judicial supervision by investigating magistrate Xaviere Simeoni after spending 36 hours being questioned by financial police.
The move gives the judge time to investigate before ordering a trial or dropping “breach of trust” charges.
The terms of the judicial supervision order ban the trader from leaving France or having any contact with employees of Caisse d’Epargne.
The bank’s top three executives quit after the losses became known on October 17.
Jean Reinhart, the lawyer for Caisse d’Epargne, said in a statement that Caisse Nationale des Caisses d’Epargne – the holding company of the Caisse d’Epargne group – had acknowledged the charge against its former trader and confirmed its intention of becoming a civil party in the case “shortly”.
Paris prosecutors are investigating whether there are grounds for a possible legal case of breach of trust. Police searched Picano-Nacci’s residence on the outskirts of Paris yesterday for possible evidence.
French Finance Minister Christine Lagarde said last week that an initial investigation discovered “serious holes” in the bank’s system of controls. Citing a preliminary report by France’s banking commission, she said the losses came in complex trades far removed from the bank’s core business.
The losses drew comparisons with the much larger trading scandal suffered by another French bank, Societe Generale, earlier this year. Societe Generale took a €4.9bn hit closing what it says were unauthorised positions by former trader Jerome Kerviel.
However, a source close to the inquiry said today there was no evidence at this stage that the trader used the same techniques as Kerviel to disguise his losses.