France: Rogue trader police question second man

French police were questioning a second trader today in the inquiry into massive losses at Societe Generale bank.

The man, from a brokerage part-owned by Societe Generale, was taken into custody yesterday said a justice ministry official. Police refused to comment.

The newspaper Le Monde said the broker was being questioned about his relationship with Jerome Kerviel, the futures trader accused of massive unauthorised deals on European markets that cost the bank around €4.9bn.

Le Monde said police suspect the new trader being held was aware of Kerviel’s activities.

Societe Generale has said it believes that Kerviel had no accomplices.

Kerviel was in custody for two days last month, and judges filed preliminary charges against him but released him during the investigation.

Judges today were considering a request from prosecutors that Kerviel be jailed while the investigation continues.

A Societe Generale spokeswoman confirmed that an employee of Newedge, a 50-per cent owned affiliate, was in police custody in the Kerviel probe. “We are co-operating closely with police,” she said.

Le Monde said new evidence provided by Societe Generale for the legal probe into Kerviel’s actions included a message sent by the second trader to Kerviel over the bank’s computer system. The newspaper said the message, sent last November read: “You have done nothing illegal in terms of the law.”

Societe Generale announced on January 24 that it lost billions in cleaning up unauthorised transactions by 31-year-old Kerviel. It said Kerviel overstepped his authority and bet more than €40.3bn – more than the bank’s market value - on futures in European equity markets. It also said he did not appear to have profited personally from the trades.

Since the case broke, Societe Generale has faced questions about its future, amid speculation it could be bought out or broken up, and about how Kerviel’s activities went unnoticed or ignored.