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SocGen rogue faked a name to cover bets

City A.M. Reporter
FORMER Société Générale trader Jérôme Kerviel admitted creating a fake client called “Matt” to cover ­massive unauthorised bets with a ­broker yesterday.

The 33-year-old told a court on the sixth day of his trial how he had lied to broker Moussa Bakir about the driven, rugby-loving “Matt”, who worked for a hedge fund, in response to Bakir’s questions about his strategy.

Bakir had earlier told the court that Kerviel claimed his risky bets were the result of pressure from “Matt”, whose aim was to make a ­billion in profit.

“I told him a fib ... [Bakir] wanted to know what my underlying strategy was,” said Kerviel, who risks five years in jail and a €375,000 (£312,000) fine if found guilty of charges of breach of trust, computer abuse and forgery.

Bakir told the court Kerviel’s trades had brought him a bonus of €1m. He said the aim of a trader was to make money, but acknowledged one “had to follow the rules”.

SocGen blames Kerviel for €4.9bn in trading losses in early 2008 that brought the bank close to collapse. It argues he acted alone and without the knowledge of his bosses.

Kerviel admits building up unauthorised positions worth an estima­ted €50bn but insists his superiors knew what he was doing and tolera­ted breaches of risk controls.

SocGen’s representative in court, Claire Dumas, has said the bank was unable to detect the fictitious positions Kerviel used as cover because the trader knew how to work the ­system. “He took out all the young girls from the support desk,” Dumas said this week.

The bank is trying to move on from the scandal with a new management team and strategy which it unveiled at an investor event yesterday.

Kerviel’s trial is due to run until 25 June.