The Strategist

Societe Generale to pay € 450 th. to rogue trader Kerviel

06/07/2016 - 15:42

According to the board members, the bank employee was fired "without real and weighty reasons, in an insulting way".

Raphaëlle MARTIN
Raphaëlle MARTIN
French bank Societe generale will have to pay to its former employee Jerome Kerviel compensation in amount of € 450 th. for unjustified dismissal. This decision was made by a Paris employment tribunal.

According to the council’s members, Kerviel had been dismissed "without real and weighty reasons, in an insulting manner." By their estimation, the trader’s dismissal in 2008 was initiated by the bank's management on the basis of violations for which the term of limitations has expired. The Paris employment tribunal found out that the bank's management was well aware of the fictitious operations carried out by Kerviel, and, in fact, condoned the actions.

As a result, the civil court awarded the bank to pay to the employee a bonus of € 300 thousand. Exactly this sum Kerviel didn’t receive back in 2007. With compensation for legal and moral costs, total amount of payments to Kerviel amounted to € 450 thousand by decision of the Board.

After learning about the decision, Kerviel expressed satisfaction with the verdict. The Societe generale, in turn, described the incident as shocking and vowed to appeal.

In 2010, Jerome Kerviel was sentenced to imprisonment for a term of five years. The sentence included two years’ probation for carrying out speculation on the market on behalf of Societe generale, and providing deliberately false data in the control bodies. Total amount of speculations amounted to tens of billions of euros. Originally, Kerviel was demanded to pay compensation in the amount of € 4.9 billion, but recently, the Court of Cassation overturned this clause. In May 2014, Kerviel was put in prison, and in a few months released from custody with an electronic bracelet. 

Kerviel himself has repeatedly stressed that he carried out his illegal activities with silent agreement of the bank's management, which was well aware of the fraud committed by the employee. However, Societe generale was not considering such actions as something criminal as long as they was making a profit. In the spring of 2014, the court quashed the fine, which was unprecedented in the history of the French jurisprudence, but upheld the prison sentence.