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French trader 'concealed deals' French trader 'concealed deals'
(30 minutes later)
The trader at the centre of an investigation into losses at Societe Generale has admitted to hiding deals, according to the Paris prosecutor.The trader at the centre of an investigation into losses at Societe Generale has admitted to hiding deals, according to the Paris prosecutor.
Jerome Kerviel told police he concealed his actions to "appear like an exceptional trader and earn higher bonuses", the prosecutor said.Jerome Kerviel told police he concealed his actions to "appear like an exceptional trader and earn higher bonuses", the prosecutor said.
Last week, Societe Generale revealed a 4.9bn-euro ($7.1bn; £3.7bn) loss, which it blamed on Mr Kerviel.Last week, Societe Generale revealed a 4.9bn-euro ($7.1bn; £3.7bn) loss, which it blamed on Mr Kerviel.
Lawyers for Mr Kerviel said he had "committed no dishonest act".Lawyers for Mr Kerviel said he had "committed no dishonest act".
'Great pretender''Great pretender'
"He did not siphon off a single cent, and did not profit in any way" from the bank's assets, Mr Kerviel's lawyers told AFP."He did not siphon off a single cent, and did not profit in any way" from the bank's assets, Mr Kerviel's lawyers told AFP.
They also accused the bank of trying to "create a smokescreen which would divert public attention from losses that were significantly more substantial than those it accumulated in recent months".They also accused the bank of trying to "create a smokescreen which would divert public attention from losses that were significantly more substantial than those it accumulated in recent months".
But the bank says that it is the victim.But the bank says that it is the victim.
The prosecutor has asked for preliminary charges of forgery, breach of trust and fraud to be filed against a trader.The prosecutor has asked for preliminary charges of forgery, breach of trust and fraud to be filed against a trader.
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."
Paris prosecutor Jean-Claude Marin said a formal fraud investigation had been opened and he had requested that Mr Kerviel be placed in temporary detention.Paris prosecutor Jean-Claude Marin said a formal fraud investigation had been opened and he had requested that Mr Kerviel be placed in temporary detention.
'Unfavourable market''Unfavourable market'
Societe Generale says he gambled about 50bn euros ($73bn; £37bn) before being discovered.Societe Generale says he gambled about 50bn euros ($73bn; £37bn) before being discovered.
The bank said that Mr Kerviel, 31, appeared to have been operating alone.The bank said that Mr Kerviel, 31, appeared to have been operating alone.
When the bank closed all the deals he had allegedly made, it was hit with a loss of 4.9bn euros.When the bank closed all the deals he had allegedly made, it was hit with a loss of 4.9bn euros.
In my opinion, it is his bosses and employers who should be looked into Sylviane Le GoffAunt of Jerome KervielIn my opinion, it is his bosses and employers who should be looked into Sylviane Le GoffAunt of Jerome Kerviel
Societe Generale said his background in handling the administration of trades enabled to fool those who are meant to monitor traders' activities.Societe Generale said his background in handling the administration of trades enabled to fool those who are meant to monitor traders' activities.
He had committed some 50bn euros to purchase "futures" portfolios - effectively betting on the future direction of the stock market - the bank said.He had committed some 50bn euros to purchase "futures" portfolios - effectively betting on the future direction of the stock market - the bank said.
Journalists have yet to get a glimpse of Mr KervielJournalists have yet to get a glimpse of Mr Kerviel
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.
Traders are supposed to balance each purchase with a sale, but Mr Kerviel allegedly made up fictitious sales, leaving the bank massively overcommitted.Traders are supposed to balance each purchase with a sale, but Mr Kerviel allegedly made up fictitious sales, leaving the bank massively overcommitted.
Societe Generale said the deals, after being discovered last weekend, had to be "undone as soon as possible, due to the risks tied to the amount", even though "market conditions were very unfavourable".Societe Generale said the deals, after being discovered last weekend, had to be "undone as soon as possible, due to the risks tied to the amount", even though "market conditions were very unfavourable".
Prices were falling on stock markets around the world, meaning when the positions were closed, the bank showed a 4.9bn euro loss.Prices were falling on stock markets around the world, meaning when the positions were closed, the bank showed a 4.9bn euro loss.
The bank said its traders worked on the matter for three days, finally closing the positions on 23 January.The bank said its traders worked on the matter for three days, finally closing the positions on 23 January.
Analysts have suggested that Societe Generale's massive sell-off may have played a part in sparking the huge losses suffered by world stock markets early last week.Analysts have suggested that Societe Generale's massive sell-off may have played a part in sparking the huge losses suffered by world stock markets early last week.
The bank denies this.The bank denies this.
"It is not Societe Generale's responsibility if the Asian markets crashed on Monday morning after an American insurance company announced having problems on the previous Friday afternoon, " said the firm's chief executive."It is not Societe Generale's responsibility if the Asian markets crashed on Monday morning after an American insurance company announced having problems on the previous Friday afternoon, " said the firm's chief executive.
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
'Shy''Shy'
Mr Kerviel disappeared after the news of the losses at Societe Generale broke on Thursday, fuelling speculation he had fled.Mr Kerviel disappeared after the news of the losses at Societe Generale broke on Thursday, fuelling speculation he had fled.
But it is now reported that he was staying with his older brother, Olivier. Mr Aldebert said he had handed himself in voluntarily. But it is now reported that he was staying with his older brother, Olivier. Mr Aldebert, head of the financial division of the Paris prosecutor's office, said he had handed himself in voluntarily.
Police searched Mr Kerviel's Paris flat on Friday and also visited the Societe Generale headquarters, where he worked, leaving with documents and computer disks.Police searched Mr Kerviel's Paris flat on Friday and also visited the Societe Generale headquarters, where he worked, leaving with documents and computer disks.
Meanwhile, Mr Kerviel's acquaintances have described him as a shy, considerate person who liked judo and sailing.Meanwhile, Mr Kerviel's acquaintances have described him as a shy, considerate person who liked judo and sailing.
An aunt of his told French news agency AFP her nephew "must have been manipulated".An aunt of his told French news agency AFP her nephew "must have been manipulated".
"They are an honest family, who have nothing to reproach themselves for," said Sylviane Le Goff."They are an honest family, who have nothing to reproach themselves for," said Sylviane Le Goff.
"The young man has always been serious, reserved. In my opinion, it is his bosses and employers who should be looked into," she said."The young man has always been serious, reserved. In my opinion, it is his bosses and employers who should be looked into," she said.