Posted on 02/08/2008 5:24:55 AM PST by TigerLikesRooster
Police question second trader
By PIERRE-ANTOINE SOUCHARD, Associated Press Writer
14 minutes ago
French police were holding a second person for questioning about the loss of billions at bank Societe Generale, a judicial official said Friday.
The person, who worked at a brokerage partially owned by Societe Generale, was taken into custody on Thursday and was still being held, said the official, who asked not to be identified because of the sensitivity of the case.
Bank spokeswoman Joelle Rosello confirmed that an employee of Newedge, a 50-percent owned affiliate, was in custody in connection with the scandal.
"We are cooperating closely with police," said Rosello.
The daily Le Monde was the first to report that police were questioning a second employee about connections with Jerome Kerviel, a futures trader accused by Societe Generale of massive unauthorized bets on European markets that the bank said cost nearly $7 billion to unwind.
Le Monde reported that police suspect the second trader was aware of Kerviel's unauthorized trades. It said the broker was taken into custody after a search of his company offices on Thursday.
Societe Generale has said it believes Kerviel had no accomplices.
Preliminary charges have been filed against Kerviel and he remains under police protection, but he has been released.
Le Monde said new evidence provided by Societe Generale for the legal probe into Kerviel's actions included a message sent by the second trader to Kerviel over the bank's computer system. The newspaper said the message, sent last Nov. 30, read: "You have done nothing illegal in terms of the law."
Societe Generale announced Jan. 24 that it lost 4.82 billion euros ($7.09 billion) cleaning up unauthorized transactions by 31-year-old Kerviel. It said Kerviel overstepped his authority and bet 50 billion euros ($73 billion) — more than the bank's market value — on futures in European equity markets. The bank said it did not appear that Kerviel profited personally from the trades.
Since the case broke, Societe Generale has faced speculation that it could be bought out or broken up, and about how Kerviel's activities went unnoticed or ignored.
Judges on Friday were to weigh a request from prosecutors that Kerviel be taken into custody while the investigation continues.
A spokeswoman for the prosecutors' office, Ulrika Weiss, said Kerviel should be held to prevent him from contacting accomplices, if they exist.
Investigating judges have filed preliminary charges against Kerviel for forgery, breach of trust and unauthorized computer activity.
____
Associated Press writer Pierre-Antoine Souchard contributed to this report.
Ping!
When I first read the headline, I couldn't figure out what a Second Grader knew about trading. Must have more coffee. . . . .
I thought it said second traitor...which actually made sense
SocGen probe widens to Fimat employee
By Peggy Hollinger, John O’Doherty and Scheherazade Daneshkhu in Paris, and Stanley Pignal and Jo Chung in London
Published: February 8 2008 11:00 | Last updated: February 8 2008 13:26
Moussa Bakir, an employee of Fimat, a financial services company that was Société Générale‘s brokerage arm, was being interviewed by French financial police on Friday on suspicion of links to Jérôme Kerviel, the man at the centre of a massive trading scandal, the Financial Times has learned.
French police searched the Paris offices of Fimat on Thursday afternoon, shortly after they had taken the Fimat employee into custody.
Contacted by the Financial Times, Mr Bakir’s lawyer, Jean-David Scemama, did not immediately return calls seeking comment.
According to various social networking websites, Mr Bakir is a sales trader at Fimat. He is 32.
SocGen accuses Mr Kerviel of huge unauthorised dealings that forced the bank into a record €4.9bn ($7.17bn) trading loss.
Mr Kerviel used Fimat to process some of his trades. In November of last year, Eurex, the derivatives exchange, notified SocGen that Mr Kerviel had been using the London office of Fimat rather than the French office, which was the more usual practice. Mr Kerviel produced an explanation as to why he was using the London office that appeared to satisfy the bank.
At the start of this year Fimat merged with Calyon Financial, a subsidiary of the French bank Crédit Agricole, to form the brokerage business Newedge.
Later on Friday, Mr Kerviel will attend a bail hearing to decide whether he should remain at liberty while investigations continue into the SocGen affair. Lawyers for the prosecution will argue that Mr Kerviel’s liberty threatens the impartial conduct of the official probe into his actions particularly with regard to the investigation into whether Mr Kerviel had an accomplice.
Prosecutors said the timing of this latest arrest had nothing to do with the bail hearing this afternoon.
“It is a total coincidence,” said the spokesperson. “The investigators do their very best, and as soon as information is discovered, they act on it.“
Prosecutors will argue in front of a three-judge panel that the 31-year old trader should not be allowed to remain at liberty due to the gravity of his alleged crimes, and also the danger of him skipping bail as investigations into the affair deepen.
“We should keep in mind the seriousness of this crime and amounts of money involved,” the spokesperson said. “The fact that he remains at liberty could compromise the investigation.”
Mr Kerviel was released under judicial supervision 10 days ago from the offices of the Brigade Financière, the French financial police, after investigative magistrates rejected a request by the Paris prosecutor’s office to keep him in detention. Elisabeth Meyer, his lawyer, was not available for comment.
With the exception of one interview with Agence France Presse, Mr Kerviel has kept a reasonably low profile ever since, attending his interviews with magistrates, and staying with unspecified friends in the Paris region. Speaking to Le Parisien newspaper yesterday, Ms Meyer denied media reports that Mr Kerviel is under police protection.
The prosecutor’s office argues that the restrictions placed on Mr Kerviel by judges – he cannot have contact with Société Générale staff or enter a trading room – are not enough to ensure the impartiality of the investigations, which they maintain are still at a very early stage.
They are also concerned about the possibility Mr Kerviel might skip bail, and do not believe that his readiness to co-operate with investigators thus far means he is no longer a flight risk.
You can bet the search will go on until all scapegoats are found.
The Wall Street Journal had a great story on this last week. The guy had been up and down the better part of a billion dollars. In fact, he was up about 1.4 billion a few weeks before he was discovery, although the market had started to turn this into a loss. One has to wonder how much the sudden unwinding of all of his positions contributed to the loss ballooning to the full 7.2 billion.
I agree, this is just a fishing expedition for scapegoats. Anybody that sent him a text message about lunch or soccer in the past six months is undoubtedly being investigated as “a potential accomplice”.
Look for “Kerviel Associate Had Credit Card Problems In 1994” and “Former Kerviel GF: ‘Someday We’ll Have A Nice Place’” headlines in the next few weeks as the smear/confusion campaign goes into overdrive.
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