Jerome Kerviel, the Societe Generale trader fired for unauthorized trading activity which cost the French bank almost €5billion in 2008, has been awarded €400,000 (approximately $455,000) in damages over unfair dismissal.
Fired “without real and serious cause”
It has been concluded by a Paris employment tribunal that he was dismissed “without real and serious cause”. He has won €100,000 in compensation, as well as clawing back his €300,000 bonus awarded for his performance in 2007, with SocGen forced to pay €80,000 immediately.
In a statement released by the bank, known for its leading equity derivatives business, SocGen made clear their dissatisfaction with the ruling, “this decision is incomprehensible and inconsistent with the decision of the supreme court which has passed definitive sentence on Jérôme Kerviel. It is counter to the facts that have been judged. We will appeal against this decision.” Their lawyer, Arnaud Chaulet, added the appeal would be lodged “immediately.”
The focus of Kerviel’s defense was that although he was acting well outside of his risk and capital parameters, the bank were fully aware, and while he was making money there were no problems, it was only was his trades turned sour that the bank terminated his employment.
The judge presiding over the case, Hugues Cambournac concluded, “Société Générale can’t pretend it was not aware of Jérôme Kerviel’s fake operations.”
Kerviel amassed €50 billion in unauthorized trades, which ultimately ended up costing SocGen €4.9 billion to unwind.
Although a victory for Kerviel, he had been asking for a lot more. He had wanted double the compensation (€800,000) and wanted the €4.9 billion debt hanging over his head removed (he has been ordered to repay all money lost which he has subsequently described as a “lifetime death sentence”).
This ruling comes just before Kerviel is due to start a separate civil case, looking at how responsibility should be divided for the ‘rogue trading’ scandal. SocGen has always vigorously denied any knowledge of the activity but has admitted that internal controls were insufficient and received a €4 million fine in 2008.
Kerviel was found guilty of ‘breach of trust, forgery and unauthorized use of the bank’s computers’, in 2010, and this charge was upheld after appeal, by the highest court in France, concluding he was solely responsible for the huge losses suffered by SocGen.