A Collaboration with the University of Pittsburgh

France court orders release of 'rogue trader' while bank fraud probe continues

[JURIST] French "rogue trader" Jerome Kerviel [BBC profile] was released from prison Tuesday after a French court ordered that he be freed while the investigation continues into fraudulent activity allegedly conducted by Kerviel while employed at French Bank Societe Generale [corporate website]. The court ordered Kerviel not to leave the country or communicate with a number of former colleagues. The New York Times has more.

Kerviel had been in custody [JURIST report] since February 8 when the Paris appeals court granted a request by prosecutors to hold Kerviel in "provisional detention." Societe Generale, which lost $7 billion when it was forced to unload the fraudulent positions, described the methods Kerviel supposedly used to commit the fraud in an explanatory note [PDF text]. Kerviel has maintained that he acted alone, but also says that he is being made a scapegoat [Telegraph report] by the bank, which he alleges was aware of his activities. Additionally, BusinessWeek reports [text] that the Eurex derivatives exchange [exchange website] warned Societe Generale in November about Kerviel's unauthorized transactions. A second banker was detained [JURIST report] last week in connection with the investigation.

About Paper Chase

Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

© Copyright JURIST Legal News and Research Services, Inc., 2013.