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Charges over French bank losses Charges over French bank losses
(40 minutes later)
Preliminary charges have been filed against the trader blamed for huge losses at French bank Societe Generale, according to his lawyer. Preliminary charges have been filed against Jerome Kerviel, the trader blamed for huge losses at French bank Societe Generale.
Jerome Kerviel will be investigated for breach of trust, falsifying documents and breaching computer security, but not for fraud. His lawyer said he would be investigated for breach of trust, falsifying documents and breaching computer security - but not for fraud.
His lawyer, Elisabeth Meyer, said he had been released on bail, but would not disclose his whereabouts. Elisabeth Meyer said Mr Kerviel had been released on bail, but would not disclose his whereabouts.
Societe Generale says his actions cost it 4.9bn euros ($7bn; £3.7bn).Societe Generale says his actions cost it 4.9bn euros ($7bn; £3.7bn).
Earlier, a Paris prosecutor said Mr Kerviel concealed his trades to make him appear an "exceptional trader", but he did not mean to damage the bank. Under French law, a formal investigation does not automatically guarantee that a trial will follow.
'Great pretender" Breach of trust carries a maximum sentence of three years in prison and a fine of 370,000 euros ($546,637; £186,562).
'Great pretender'
Earlier, a Paris prosecutor said Mr Kerviel had concealed his trades to make him appear an "exceptional trader", but he did not mean to damage the bank.
"He did not do it directly for his personal gain. He acted as a trader, he certainly acted outside the authorisation he'd been given to trade on the market, but he didn't do it expressly to damage the bank through fraudulent operations," said prosecutor Jean-Claude Marin."He did not do it directly for his personal gain. He acted as a trader, he certainly acted outside the authorisation he'd been given to trade on the market, but he didn't do it expressly to damage the bank through fraudulent operations," said prosecutor Jean-Claude Marin.
SOCIETE GENERALE IN FIGURES Founded in 1864467bn euros in assets under management (as of June 2007)22.5m customers worldwide120,000 employees in 77 countries Societe Generale share priceSOCIETE GENERALE IN FIGURES Founded in 1864467bn euros in assets under management (as of June 2007)22.5m customers worldwide120,000 employees in 77 countries Societe Generale share price
Societe Generale says Mr Kerviel had a position, or a bet, worth about 50bn euros ($73bn; £37bn) on the future direction of European shares.Societe Generale says Mr Kerviel had a position, or a bet, worth about 50bn euros ($73bn; £37bn) on the future direction of European shares.
That was more than the bank's value - about 35bn euros - and about the size of France's entire annual budget deficit.That was more than the bank's value - about 35bn euros - and about the size of France's entire annual budget deficit.
To avoid that potentially catastrophic loss the bank had to unwind Mr Kerviel's trades, but that still cost it 4.9bn euros.To avoid that potentially catastrophic loss the bank had to unwind Mr Kerviel's trades, but that still cost it 4.9bn euros.
Societe Generale said Mr Kerviel's background in handling the administration of trades enabled him to fool those monitoring traders' activities.Societe Generale said Mr Kerviel's background in handling the administration of trades enabled him to fool those monitoring traders' activities.
It says Mr Kerviel invented deals that, on paper, balanced out his bets.It says Mr Kerviel invented deals that, on paper, balanced out his bets.
Journalists have yet to get a glimpse of Mr KervielJournalists have yet to get a glimpse of Mr Kerviel
But the bank's internal controls are being questioned.But the bank's internal controls are being questioned.
Mr Marin says the European derivatives exchange, Eurex, questioned Mr Kerviel's trading positions in November.Mr Marin says the European derivatives exchange, Eurex, questioned Mr Kerviel's trading positions in November.
He also said Mr Kerviel told police that other traders had exceeded their trading limits.He also said Mr Kerviel told police that other traders had exceeded their trading limits.
But the bank insisted it was the victim of a complex deception.But the bank insisted it was the victim of a complex deception.
Speaking on French radio, Daniel Bouton, chief executive of Societe Generale, said: "This fraud has been committed by a great pretender, who has succeeded in navigating the many sophisticated control systems that we have, to permanently conceal what he was doing, while also going about his normal activities."Speaking on French radio, Daniel Bouton, chief executive of Societe Generale, said: "This fraud has been committed by a great pretender, who has succeeded in navigating the many sophisticated control systems that we have, to permanently conceal what he was doing, while also going about his normal activities."
Societe Generale's shares were down 6% on Monday.Societe Generale's shares were down 6% on Monday.