Rogue French trader to be held in jail

A COURT yesterday ordered rogue French trader Jerome Kerviel to be held in jail while investigations continue into massive losses at his bank Societe Generale.

The Paris prosecutor’s office had asked that Mr Kerviel, who was free on bail, be put behind bars for fear that he would contact accomplices, if they exist.

The ruling came as the investigation broadened, with police holding a broker from a subsidiary firm who reportedly was in contact with Mr Kerviel as he gambled away billions of the bank’s money in stock market deals.

Mr Kerviel faces preliminary charges of forgery, breach of trust and unauthorised computer activity.

Judges had allowed Mr Kerviel to go free last month, after his lawyer argued there was no risk of him fleeing.

News that police had arrested a second person, an employee at a brokerage arm of Societe Generale, again raised the question of whether Mr Kerviel acted alone.

Societe Generale, one of France’s biggest banks, has said Mr Kerviel did not appear to have accomplices when he made massive unauthorised deals on European futures markets that the bank said cost it more than £3 billion.

But the daily newspaper Le Monde reported yesterday that the bank has turned over new evidence, including a message sent to Mr Kerviel through the bank’s computer system by the broker in custody.

The message, sent last November, read: “You have done nothing illegal in terms of the law,” the newspaper said.

The employee, who worked at Newedge, a 50-50 joint venture between Societe Generale and Calyon bank, was taken into custody yesterday, said a judicial official.

A Societe Generale spokeswoman, confirmed the employee was in custody. “We are co-operating closely with police,” she said.

Le Monde said Mr Kerviel passed some trades through the brokerage, and that police suspect that the brokerage employee was aware of Mr Kerviel’s activities.

Since the scandal broke, Societe Generale has faced questions about its future. There has been speculation it could be bought out or broken up.

In addition, there have been questions about how Mr Kerviel’s activities went unnoticed.