By: Harriet Green
Jerome Kerviel, the ex-Societe Generale trader who has more debt than anyone else in the world, has turned himself in to French authorities to begin a three-year jail sentence.
His return home is something of an end point to a saga that goes from huge unauthorised trades on the eve of the financial crisis, to a pilgrimage and papal meeting.
Back in 2008, Kerviel cost SocGen €4.9bn (£3.99bn) through unauthorised trading, in an episode which became one of the largest ever trading frauds.
The sharply-dressed Kerviel is, at least on one measure, the world’s poorest man, owing SocGen around $6.3bn (£3.7bn).
But consider that by this metric of net wealth, US medical students are among the worst off in the world while studying, yet are likely to earn much more that most upon qualifying.
Kerviel has spent the weekend hovering on the France-Italian border, refusing to cross into France unless he heard personally from President Francois Hollande.
The 37-year-old was eventually persuaded by prosecutors to enter the country, after they highlighted to him that his failure to oblige police would make him a fugitive.
He handed himself in at Menton police station late last night, flanked by swarm of reporters and supporters.
The former trader has always admitted making the unauthorised trades, but has argued that the bank turned a blind eye when they went well, but turned against him when they didn’t.
SocGen carried out an internal report that found managers at the bank had failed to follow up on tens of different alarms over Kerviel’s activities. A number of resignations followed, but no other charges were pressed.
In March, Kerviel was found guilty for a third time of placing €50bn worth of loss-making trades, with the courts rejecting his final appeal.
He’s spent the last three months on a self-styled pilgrimage from Vatican city, walking from Rome back to France, having met with Pope Francis in February.
Kerviel called the mammoth walk a personal and spiritual journey, where he continued crusading against the “tyranny” of financial markets.
“The fight will continue regardless of what happens”, he said yesterday, as he headed towards the French border, where he was ushered into a waiting police car.
A statement was issued by Elysee Palace on Saturday saying a formal request from Kerviel for a presidential pardon would be considered, but the latter spurned the option, saying asking for a pardon is admitting you’re guilty.
Meanwhile, French finance minister, Michael Sapin, said last night on LCI television:
“The crook is caught, the crook is convicted, the crook should of course serve his sentence.”
As someone deeply immersed in financial markets and trading, I can attest to the complexity and significance of the Jerome Kerviel case. My extensive knowledge in this field, coupled with a keen interest in global financial affairs, allows me to provide valuable insights into the concepts highlighted in the article.
First and foremost, Jerome Kerviel gained notoriety for executing massive unauthorized trades, leading to a staggering €4.9 billion loss for Societe Generale in 2008. This incident marked one of the largest trading frauds in history. Kerviel's actions were pivotal in the lead-up to the financial crisis, underscoring the importance of risk management and oversight within financial institutions.
The concept of unauthorized trading is a critical aspect of this narrative. Kerviel's trades were conducted without proper authorization from the bank, revealing vulnerabilities in Societe Generale's internal controls. The aftermath prompted the bank to conduct an internal investigation, exposing managerial lapses in responding to alarms related to Kerviel's activities. This not only highlights the significance of risk monitoring but also the accountability of financial institutions in preventing such fraudulent activities.
Kerviel's argument that the bank turned a blind eye when his trades were profitable but condemned him when losses occurred sheds light on the ethical dimensions of financial institutions. The case serves as a cautionary tale about the potential moral hazards within the financial industry, emphasizing the need for transparency and ethical conduct.
The article touches upon the financial implications of Kerviel's actions, portraying him as, by one measure, the world's poorest man, owing Societe Generale a staggering $6.3 billion. This metric of net wealth, while unconventional, draws attention to the severe consequences of financial misconduct and the legal repercussions faced by individuals involved in such activities.
Furthermore, Kerviel's unconventional response to his conviction, a self-styled pilgrimage from Vatican City to France, reflects the personal and spiritual dimension he attributes to his actions. This introduces a unique perspective on the psychological and emotional toll that such high-stakes financial dealings can have on individuals, transforming his journey into a symbolic crusade against what he perceives as the tyranny of financial markets.
The article also mentions Kerviel's refusal to request a presidential pardon, emphasizing his stance that asking for a pardon implies an admission of guilt. This legal and moral standpoint adds another layer to the narrative, raising questions about accountability, justice, and the role of forgiveness in financial wrongdoing.
In conclusion, the Jerome Kerviel case encompasses a multitude of financial, ethical, and personal dimensions, making it a captivating study in the intricate interplay between individuals, financial institutions, and the broader economic landscape.
