Kerviel, Who Lost $5.6 Billion Trading, Loses $520,000 Case
(Bloomberg) -- Paris judges overturned the 455,500-euro ($520,000) unfair-dismissal award Jerome Kerviel had won two years ago after they rejected the notion that Societe Generale SA knew the convicted trader had been amassing gigantic positions that caused the bank a 4.9 billion-euro loss.
The Paris Court of Appeals dismissed Kerviel’s argument that Societe Generale had no valid grounds to fire him because supervisors knew he was entering fake trades to conceal his activities long before his record losing streak. Under French employment law, companies must act within two months of learning about violations or they become time-barred.
Wednesday’s verdict comes just a few months after Kerviel lost a last-ditch effort to get a retrial and blame SocGen for the massive trading loss he was found guilty of causing at the bank more than a decade ago. The 41-year-old maintains that his superiors looked the other way as long as he was making money for the bank.
The appeals judges dismissed all of his demands -- totaling nearly 2.8 million euros -- and took particular issue with Kerviel’s request for a bonus linked to his performance the year before he was dismissed.
“In light of the fraud Jerome Kerviel committed while performing his tasks, his covering up with fictitious trades in 2007 and the loses he caused, the employee is poorly placed to request a bonus,” the judges said.
Kerviel’s attorney, Julien Dami Le Coz, declined to immediately comment or say whether his client would lodge an appeal at France’s highest court. Societe Generale said the ruling “is in line with all of the decisions -- now definitive -- that have been handed down in criminal proceedings in this case.”
After successive court loses, Kerviel’s initial win in his labor lawsuit marked the first time he was able to convince a judge that SocGen didn’t suddenly stumble onto the fact that he had been taking huge gambles. The Paris employment tribunal in the 2016 decision ruled the bank knew that Kerviel was exceeding his trading limits long before firing him and “tolerated” his actions. The 455,500 euro-award Kerviel was granted included 100,000 euros for unfair dismissal and his 300,000-euro bonus for 2007.
The court of appeal decision Wednesday is yet another blow to the former trader’s attempt to shift blame onto the bank. The judges sided with SocGen in saying that Kerviel’s 2012 criminal conviction -- confirmed by France’s top court two years later -- specifies that the former trader went behind the back of supervisors.
In addition to striking out the previous award, the court said Kerviel should pay SocGen 5,000 euros in legal fees.
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