Final verdict on rogue trader

Jerome Kerviel, the man behind France’s biggest rogue-trading scandal, finds out this week if he is heading to prison or walking free after his last court appeal against his former employer Societe Generale.

Mr Kerviel submitted a final attempt in June to be acquitted and avoid a three-year jail sentence handed down in 2010 for his role in taking huge, risky bets that cost SocGen €4.9bn.

Tomorrow’s verdict, barring unexpected legal challenges, will be the final say on a case during which the former trader built a cult following.

While he has never denied masking the €50bn positions that made headlines around the world as the financial crisis unfolded in early 2008, he has maintained his bosses knew what he was doing.

The outcome will be closely watched by a financial industry facing other lawsuits over crisis-era behaviour. A similar trial is unfolding in London over the role of trader Kweku Adoboli in a €1.7bn loss at UBS.

“These appear to be spectacular cases by virtue of the size of the risks taken by these traders and the danger that they put their banks in,” said Emmanuel Moyne, a litigation lawyer at Linklaters in Paris.

“But if you compare it to cases where the amounts involved were much smaller, it is no different to people who simply cheated an internal controls system.”

SocGen, which refutes any responsibility for the trades, hopes it will be cleared in a saga that has dogged chief executive Frederic Oudea since he took over in 2009.

A ruling of responsibility or liability on SocGen’s part would probably mean the bank having to repay €1.7bn in tax write-offs relating to the losses. It would also likely get Mr Kerviel off the hook regarding the full, court-ordered repayment of the €4.9bn lost.

If Kerviel is put behind bars, the verdict will send a strong signal to the financial community — albeit four years after the bets themselves were uncovered. “The heavier the sentences, the more likely it is that traders will take them into account,” said Hubert de Vauplane, a partner at Kramer Levin. “A final prison sentence would set an example.”