A French appeals court on Friday ordered "rogue trader" Jerome Kerviel to pay a million euros to Societe Generale over the nearly five billion euros he squandered through his reckless risk-taking. But the court in Versailles, outside Paris, laid the lion's share of the blame for the 4.9 billion euro ($5.5 billion) loss at the feet of the French banking giant, citing its "woefully inadequate" internal checks.
Kerviel, 39, was "partially responsible for the loss" that brought Societe Generale to the brink of bankruptcy in 2008, the court said. But "regardless of (Kerviel's) wiles and determination, or the sophistication of the procedures he used, such a loss could not have been incurred without the woefully inadequate oversight systems at Societe Generale," the court said.
The deficiencies and "managerial choices... gave an ill-intentioned employee such as Jerome Kerviel a wide scope of action," it added. In a civil case, Kerviel was first ordered to repay the entirety of the enormous losses but that was quashed on appeal. Despite Friday's verdict that he must now pay a million euros, Kerviel said: "I still believe I owe nothing to Societe Generale." He said the decision gave him the "energy to continue the struggle" and would go on fighting for a retrial. His lawyer David Koubbi, while trumpeting that the Versailles court "wiped out 99.98 percent of the sum" hanging over his client, said he would oppose "any effort to recover" the one million euros.
Jean Veil, a lawyer for Societe Generale, had called the ruling "completely satisfactory". Koubbi said Friday's decision would be "excellent fodder" for three lawsuits that are pending against the bank as well as the bid for a retrial. The decision did not bear directly on a 2.2 billion euro tax break that the French state awarded to the bank in compensation for the losses - a protection that is available in fraud cases. But the government said it would review Societe Generale's tax situation in view of the ruling that the bank was overwhelmingly responsible.