PARIS (Reuters) - The man behind France’s biggest rogue-trading scandal will find out on Wednesday whether he is heading to prison or walking free after his last court appeal in a four-year battle against former employer Societe Generale (SOGN.PA).
The decision will be closely watched by a financial industry still battling lawsuits over crisis-era behaviour.
Former trader Jerome Kerviel submitted a final attempt in June to be acquitted and avoid a three-year jail sentence handed down in 2010 for his role in taking huge, risky bets that cost SocGen 4.9 billion euros ($6.4 billion) to unwind and damaged the French bank’s reputation.
While Kerviel has never denied masking the 50 billion euro positions that made headlines around the world as the financial crisis unfolded in early 2008, he has always said his bosses knew what he was doing - which SocGen denies.
The lack of a new “smoking gun” during this year’s appeal that might have radically shaken up the case means that Kerviel is unlikely to walk free of the charges, outside observers say.
But if the judge does not exonerate SocGen of responsibility in the case, the bank might be forced to reimburse 1.7 billion euros in tax write-offs on the losses. This might also get Kerviel off the hook from having to repay in full the 4.9 billion euros lost.
“The real question is whether the appeals court will say that SocGen bears some responsibility for the losses, or that there is no way it could have been ignorant of the trades,” said Mabrouk Sassi, a Paris-based employment lawyer.
As for Kerviel’s fate, any jail sentence could be negotiated to include lenient terms such as not spending all day behind bars, Sassi said. Because there was no direct personal enrichment from the trades, he added it was unlikely Kerviel would be handcuffed on the spot if sentenced to prison.
Wednesday may not mark the end of the affair, however.
Kerviel’s lawyer David Koubbi could still issue a challenge against the verdict by calling on the nation’s highest appeals court, the Cour de Cassation, to rule on the legality of the previous judges’ decisions.
Editing by Catherine Evans