French rogue trader inquiry looks into London

French financial investigators are searching for a London-based broker believed to be tied in with rogue trader Jerome Kerviel’s massive fraud.

They are trying to learn the identity of the man, the third person mentioned in the inquiry into losses of more than £3.5bn (€4.6bn) by bank Societe Generale.

Emails already unearthed between Jerome Kerviel and broker Moussa Bakir include multiple references to a mysterious third trader – known simply as Mat – whom investigators have so far been unable to locate, Isabelle Montagne, a spokeswoman for the Paris prosecutors’ office, said today.

Kerviel, 31, has said he was working alone but that his bosses at Societe Generale must have been aware of his massive risk-taking, and turned a blind eye as long as he was making money for the bank. Investigators are searching for others who could have known about, or participated in, what the bank says was Kerviel’s unauthorised activity.

They have questioned Bakir, who worked for a company jointly owned by Societe Generale and through which Kerviel passed some of his trades.

According to Kerviel’s exchanges with Bakir via internal messaging, Kerviel said he was in contact with Mat, a London-based broker, who covered some of his positions, Ms Montagne said.

Some French newspaper reports said that initial findings suggest Mat never existed, and that Kerviel invented him to justify some of his operations.

“We haven’t found him for the moment,” Ms Montagne said. “It’s too soon to say he’s a imaginary accomplice because investigations are not finished.”

Kerviel was jailed by a French court earlier this month on concerns that if left free he could have contacted possible accomplices. His lawyers have lodged an appeal for his release.

He is being held on preliminary charges of breach of trust, forgery and unauthorised computer activity. If tried and convicted on those charges, he faces up to three years in prison and hefty fines. Such charges mean judges have decided that further investigation is needed.

Bakir has been on sick leave since French judges named him as a material witness in their investigations into Kerviel’s trades.