Ex-SocGen Trader in Euribor Case Faces $9.1 Million Question
(Bloomberg) -- A former Societe Generale SA trader was given a $9.1 million challenge by a Paris court: Go to the U.K. to face charges that he rigged a key interest rate or give up on a multi-million euro lawsuit against the bank.
Labor-law claims made by Stephane Esper should be put on hold pending the U.K. criminal case against the former trader, a Paris employment tribunal ruled Tuesday, siding with arguments made by Societe Generale. But Esper won a ruling from another court rejecting a U.K. bid to extradite him to face charges that he rigged Euribor, effectively putting the employment case in limbo.
“The court decides to postpone its ruling as it awaits an outcome to the criminal proceedings targeting Esper in Great Britain,” the Paris judges said. Before he left Societe Generale in 2009, Esper worked in Paris as a trader of European interest-rate swaps. He insists the bank made him a scapegoat for its role in the Euribor rate-rigging scandal.
A court official read out the result of the judges’ ruling but the full details of the decision won’t be available for weeks. Esper had initially sought about 8 million euros ($9.1 million) at a hearing in July after saying his career in finance is ruined. The bank countering by saying judges should hold fire on a decision to avoid prejudging the U.K. probe.
Representatives for Societe Generale declined to comment while Francois de Castro, a lawyer for Esper, didn’t immediately respond to calls. Esper may be able to appeal the employment court’s decision.
In the Esper case, a lawyer for SocGen said during the July hearing that he was in disbelief at the size of the former trader’s demands. Lionel Vuidard said that another investigation into Euribor-manipulation allegations run by the European Commission led to the bank being fined about $267 million, all because of Esper’s actions.
Esper’s employment lawyer, Alexia Boursier, said at the July hearing that SocGen should defend her client as the allegations relate to actions he undertook as part of his duties at the bank. Instead of doing so, Boursier said, the bank designated him as the sole person responsible in the Euribor scandal in a December 2013 press release where his identity could easily be recognized. Now, he lives with the constant threat of being arrested due to the U.K. case.
While Esper’s name doesn’t officially come up in the EU’s fining decision, the Frenchman was among 11 traders the U.K. Serious Fraud Office accused in 2015 of conspiring to rig the euro interbank offered rate, or Euribor.
Prosecutors in a British trial against other defendants earlier this year said Esper was part of the conspiracy to influence Euribor submitters to adjust their rate entries to benefit their trading positions.
At the July hearing, Boursier said the French bank should be made to pay millions of euros in damages to make up for the professional and psychological harm it caused in addition to covering his legal fees to fight the U.K. criminal case. She provided the employment tribunal a 2 million-pound ($2.6 million) quote a law firm drew up to cover its fees during the entire U.K. procedure.
Vuidard, for his part, put the ball in Esper’s court. It’s up to him to face the charges in the U.K. in order to be cleared or convicted, the SocGen lawyer said.
“We have nothing to do with Stephane Esper’s strategy to refuse to set foot in the U.K.,” Vuidard said in July. “He’s afraid he will get convicted. That’s why he’s refusing to face up to the criminal judge.”
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