Jerome Kerviel's lawyer Elisabeth Meyer answers the press after a Paris court ordered French trader Kerviel to be jailed while investigations continue into billions of euros (dollars) in losses he allegedly caused at Societe Generale bank.
Story Published:
Feb 8, 2008 at 9:50 AM PST
By
PIERRE-ANTOINE SOUCHARD, Associated Press Writer
PARIS - France's legal probe into massive losses at bank Societe Generale broadened on Friday, with police holding a brokerage employee who reportedly was in contact with the trader at the heart of the scandal.
The police questioning of the employee from a brokerage arm of Societe Generale came as judges weighed whether to send the trader already implicated in the scandal, Jerome Kerviel, to jail while the investigation continues.
Societe Generale, one of France's biggest banks, has previously said that Kerviel appeared to have acted alone when he made massive unauthorized bets on European futures markets that the bank said cost more than $7 billion to unwind.
The daily Le Monde reported Friday, however, that the bank has turned over new evidence, including a message sent by the broker now in custody to Kerviel over the bank's computer system.
The message, sent last Nov. 30, read: "You have done nothing illegal in terms of the law," Le Monde reported.
The employee from brokerage Newedge, a 50-50 joint venture between Societe Generale and bank Calyon, was taken into custody Thursday and was still being held Friday, said a judiciary official who asked not to be identified because of the sensitivity of the case.
Bank spokeswoman Joelle Rosello confirmed that an employee was in custody.
"We are cooperating closely with police," she said.
Le Monde reported that Kerviel passed some trades through the brokerage, and that police suspect the brokerage employee was aware of Kerviel's activities. The brokerage was searched Thursday, the paper reported.
Preliminary charges have been filed against Kerviel but he has been released.
Societe Generale announced Jan. 24 that it lost 4.82 billion euros ($7.09 billion) cleaning up unauthorized transactions by 31-year-old Kerviel. It said Kerviel overstepped his authority and bet 50 billion euros ($73 billion) - more than the bank's market value - on futures in European equity markets. It also said he did not appear to have profited personally from the trades.
Since the scandal become public, Societe Generale has faced speculation that it could be bought out or broken up, and about how Kerviel's activities went unnoticed or ignored.
Judges on Friday were to weigh a request from prosecutors that Kerviel be taken into custody while the investigation continues.
A spokeswoman for the prosecutors' office, Ulrika Weiss, said Kerviel should be held to prevent him from contacting accomplices, if they exist.
Investigating judges have filed preliminary charges against Kerviel for forgery, breach of trust and unauthorized computer activity.
----
Associated Press writer John Leicester contributed to this report.
You
