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France's biggest rogue trader to serve 3-year prison term

By the CNN Wire Staff
updated 9:31 AM EDT, Wed October 24, 2012
French rogue trader Jerome Kerviel arriving at the courthouse in Paris on June 27.
French rogue trader Jerome Kerviel arriving at the courthouse in Paris on June 27.
STORY HIGHLIGHTS
  • NEW: Societe Generale says it has "great satisfaction" regarding the court's decision
  • NEW: A lawyer for Jerome Kerviel says he is considering a final appeal
  • The court upholds the original sentence, sending Kerviel to prison for three years
  • The former employee traded $65 billion for nearly $6 billion in losses

(CNN) -- Jerome Kerviel, the man behind France's biggest rogue-trading scandal, lost his appeal Wednesday against his prison sentence for betting €50 billion (about $65 billion) of a French bank's money without its knowledge.

The Paris court upheld the five-year sentence with two years suspended that was handed down in October 2010, Kerviel's lawyer, David Koubbi, said. The ruling means Kerviel will serve three years in prison.

The ruling that Kerviel must pay €4.9 billion (about $6.3 billion) in damages to the bank, Societe Generale, was also upheld.

"We had set ourselves the objective of defending Mr. Kerviel against an injustice that is absolutely lamentable," Koubbi said outside the courthouse, according to CNN affiliate BFM-TV. "We will continue to support Mr Kerviel in his fight."

Koubbi said the legal team would consider the possibility of an appeal in France's court of final appeal, the Cour de Cassation.

Jean Veil, a lawyer for Societe Generale, told BFM-TV that he had "great satisfaction regarding the court's decision to name Jerome Kerviel as solely responsible for the fraud."

The bank was pleased with the original conviction because it placed responsibility for the rogue trades on Kerviel and not the bank. If Kerviel's conviction were overturned, it could once more raise questions about the bank's role in the scandal.

The bank had previously indicated it might not require Kerviel to pay the damages, as it would be an impossible sum to shell out even in multiple lifetimes.

The former Societe Generale employee went on trial in June 2010 on charges of forgery, breach of trust and unauthorized computer use. The banks says the unhedged bets cost it almost $6 billion.

Kerviel had pleaded guilty to the charge of computer abuse, but his attorney at the time, Olivier Metzner, had asked jurors in his closing arguments to acquit his client of the charges of breach of trust and forgery.

Metzner previously told CNN that Kerviel's behavior was strongly influenced by the environment at Societe Generale. "The banks are the ones to blame for the banking system and the systematic economic crisis, not Jerome Kerviel," he said.

Metzner filed the appeal against the sentence, but Kerviel switched to Koubbi as his attorney in March this year.

Koubbi lamented that "despite the new elements added to his defense," Kerviel's appeal had failed.

Kerviel traded European index futures for the bank. He was the only person ever charged in the case, despite claiming he did everything with the knowledge of his superiors.

"I am convinced the criminal file is full of elements proving that my superiors knew and covered for me. At least I shouldn't be the only one in the dock," he told CNN after the release of his memoirs, "Trapped in a Spiral: Memoirs of a Trader," in which he pleads his innocence.

"These managers earned colossal amounts of money out of bonuses based on the ever-growing results that I was making for the bank," he said.

Societe Generale, which said it discovered the losses in January 2008, said that at no time were supervisors aware of Kerviel's alleged unlawful activities.

CNN's Dheepthi Namasivayam, Sybile Penhirin and Pierre Meilhan contributed to this report.

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