$7 Billion Trader: “I Did Not Take One Cent in This Affair”

Feb 6, 2009 9:10am

By Christophe Schpoliansky, ABC News On Jan. 28, 2008, the world woke up to the news that a French bank, Société Générale, had lost close to $7 billion at the hands of a single trader, Jérôme Kerviel.  It was considered at the time one of the biggest rogue trading scandals in history.    Last week, judges investigating the case submitted the conclusions of their inquiry to state prosecutors. Kerviel, 32, is expected to stand trial on charges of breach of trust, fabricating documents and illegally accessing computers. His former assistant, Thomas Mougard, 24, is also expected to stand trial after he was charged last year with "complicity in introducing false data into a computer system." This morning, Kerviel gave an interview to France’s  No.1 radio station, RTL. Speaking publicly for the first time since the end of the investigation, Kerviel insisted that he could not have gambled away so much without his superiors’ knowledge. Here are the highlights of this morning’s  radio interview: Q: “The investigation says no personal enrichment…” JK: “No, I did not take one cent in this affair. Certainly, I have a part of responsibility, I did some stupid things, I admit it. But all these stupid things, I was able to do them only because the bank let me do them and encouraged me to do them. At the beginning of the affair, the lawyer for the Société Générale bank said: ‘It’s the story of a man who saw the car open and who stole it.’ The story that concerns me is absolutely not that one. They opened the car door, gave me the keys and head nods telling me ‘go ahead, go for a ride.’ They encouraged me to do it. They watched me doing it. And one day, they say,  ‘the car got stolen.’ And this is really what happened. They let me do it and the day they lost out, when it was convenient for them, they abandoned me. I did a stupid thing, that’s clear. I did a real stupid thing but, once again, I was able to do this stupid thing because they let me do it." Q: Jerome Kerviel could not have gone outside the hierarchy? JK: “No, that’s impossible. Everything was visible. I took my positions in front of everyone, in front of managers. I wanted to earn money for my bank, all my operations were seen, monitored and controlled. Do you honestly believe a 15 billion  [euro]  operation  [about $19.2 billion]  could go unnoticed and that the bank would ask no questions? For my part, I wasn’t hiding myself. I was at the middle of the desk and everyone could see me work.” Q: And the others were often doing the same? JK: “Yes. … I’m not here to finger anyone but yes. There is something to keep in mind, that is all our acts and gestures are controlled in real time. We’re all next to each other, we can hear exactly what each other are saying on the phone next to us. We can’t do anything without other people noticing.     Q: Why have you decided to speak today? JK: “Now that the investigation is over, I’ve regained my freedom of speech. Especially,  since a lot of things which have been said and written on the affair, on me and on my life are completely false. That I am a terrorist, that I am autistic, that I moved on my own within the systems in a completely undetectable way. I did not steal anything, I did not want to play, I was never undetectable, I’m not someone secret and I’m not a liar. And I wish today to re-establish a bit of truth. Q: Jan. 18, 2008, you’re summoned by the Société Général management. How did it go? JK: “Looking back, I would say it was more like I was being questioned by the police than anything else. They tried to make me say things I did not want to say, things that were not true. They wanted to make me confess things I had never done. Probably to make me hold a responsibility alone in a small office with people who took turns to question me.” Q: And from there… JK: “Everything goes very quickly. I see my picture all over the  Internet, on television. I really feel like I’m in a movie and I don’t understand why they abandoned me at that time. It just happened overnight. At no point I could have imagined. It was a fury  [the day the bank announced the loss]. I started realizing a bit the day before the Société Générale announced the loss. When an employee of the bank called me and said,  ‘get out of Paris, change your cell phone number, buy a train ticket and leave.’” Q: What is your response after the bank employee tells you to get out of town? JK: “I’m a bit destabilized. I’m being told there is going to be an announcement. I don’t know what the content of this announcement is. Everything goes very quickly. My name is circulating everywhere. I don’t understand what’s happening. I’m completely overtaken. And even today, I’m completely overtaken, on both at the emotional and media levels. I don’t completely take the measure of what’s happening, even today.”    Q: The bank lodged a complaint. You know you’re going to be questioned by the police… JK: “Very quickly, I’m summoned to the financial brigade of the French police. It’s a shock for me. It’s never pleasant to be held for questioning. It’s long. I recognize my part of the responsibility, I say ‘this is how it happened.’ I explain myself on what I did. I became a trader in 2005, I had a financial target of 3 millions euros  [about $3.8 million] to reach. In 2008, my financial target was 55 million euros [about $70.6 million]. Just give me a sector where such return is asked of an employee? It means stress, a daily pressure to achieve these results. There is a real pressure on the trader. Every day, at the end of the day, your manager comes to you, asking, ‘did you win today? Were you a good winner?’ I heard this expression time and time again: ‘Were you a good winner today?’” Q: It’s been said as well that you wanted to stand out,  compared to other traders? JK: “No, absolutely not. My goal was not to stand out vis-à-vis the other traders. Maybe I had fewer diplomas than some of them, this is what was said a lot at the beginning, that I wanted to stand out because I had fewer diplomas. I was just trying to do my job.” Q: What was the most difficult time, the moment when you maybe had doubts? JK: “The image that I keep in my mind is the look of my mom in a 2-meter-square  [6.5-foot-square] hallway at the Paris prison at the time of the visiting room. I don’t wish to say anymore   on this. The only thing that I can say is that I’m lucky to have a mom who loves me and that’s great. She supported me a lot during this period. I keep this image in my head at all time, and this is what allows me to keep moving forward.”  Q: What about these suspect transactions? Did you go over what you’re allowed? JK: “I admit I went too far, I took important positions.  There is a certain disconnection of reality at some point. Numbers no longer really mean anything. The first trade that I made was for 200,000 [euros, about $256,000]. My hand was trembling; that’s almost the price of an apartment. After a week,  I had forgotten the fear. I allowed myself to fall into a self-perpetuating spiral onto which my bosses poured fuel, so that it turned at top speed. This was my job, the trading room.  It was a complete cocoon. I felt good in it.” Q: What was a good day for Jerome Kerviel at the Société Générale? JK: “A good day for a trader in the sector of activity I was in, it is about 40,000, 50,000 euros  [about $51,000, $64,000] in profit.  I posted some days at 1 million euros  [about $1.3 million]. These were completely unreal numbers but it was considered as normal.” Q: Were you ever told “be careful, you’re going too far”? JK: “No, at no point did anyone tell me ‘stop.’  I would have liked someone to have said, ‘Enough with this stupidity, it’s going to turn out badly.’ The reaction of my managers and my superiors encouraged me to continue since everybody was satisfied. I had no reprimand.” Q: You have said that the investigation was sponsored by the SG  [Société Générale ] ? JK: “I indeed have the impression that the SG pulls the strings in this investigation, that it is driven by the bank.  What I can guarantee you is that I will keep fighting until the end.” Q: Do you have any desire to return to trading? JK: “Certainly not. This is a circle I no longer want to know. This is no longer a place I want to frequent; these are people I no longer want to know. Everything is fake in this circle, everything is unreal, and everything is based on the appearance. I no longer recognize myself in this circle. I’ve opened my eyes." Q: What would you say to Jerome Kerviel if you did not know him and if you met him? JK: “How bloody stupid you’ve been! Looking back, I let myself be carried away by a whole system." Q: Is it true you’ve been solicited for books, movies? JK: “No, it’s not true. I have absolutely no desire to become famous, that my life be laid out in the newspapers, that utter lies be written about me, that things I said be stolen, that photos of me be stolen. It’s not always pleasant. Even if it’s always nice to have people give you messages of support, it’s indeed oppressive. It’s not in my nature to express myself, to expose myself. It’s just not me.” Q: When this will be over, what will you be looking for? JK: “Anonymity, peace and live peacefully." Q: That you’re no longer being recognized in the street? JK: “That I don’t get recognized in the street, that I don’t see my name written everywhere in newspapers as soon as there is news.” Q: You don’t want to see photographers in front of your door? JK: "Indeed,  it would suit me just fine to not be followed. I just want to be forgotten, simply." Q: Who was Jerome Kerviel before scandal and who is he today? JK: Before and after, I’ve always been ‘Mr. Nobody.’ And I hope to become this once again, very quickly” In reply to the interview, Société Générale lawyer Jean Veil said Kerviel was downplaying his culpability. "He reminds me of a child who lies all the time, who does not want to accept responsibility for anything," Veil told RTL radio. "It’s always someone else’s fault, whether it’s the judge, Société Générale, management, the lawyers. It’s never him. The reality is that what he did was hidden, very cleverly and deliberately hidden."

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