BREAKING NEWS

Former French trader sentenced; required to pay back $6.7b.

By ASSOCIATED PRESS

OCTOBER 5, 2010 18:46

PARIS — Ex-trader Jerome Kerviel was convicted on all counts Tuesday in history's biggest rogue trading scandal, sentenced to three years in jail and ordered to pay his former employer a mind-numbing €4.9 billion ($6.7 billion) in damages.

The ruling marked a huge victory for Societe Generale SA, one of France's most blue-blooded banks, which has worked to clean up its image and put in place tougher risk controls since the scandal broke in 2008.

The 33-year-old former futures index trader stood expressionless as the court convicted him and pronounced a five-year sentence with two years suspended. Kerviel was found guilty on charges of forgery, breach of trust and unauthorized computer use for covering up bets worth nearly €50 billion between late 2007 and early 2008.

In the most stunning blow, the court ordered Kerviel to pay the bank back the €4.9 billion that it lost unwinding his complex positions in January 2008 — a punishment he would almost certainly be unable to pay. He was also banned for life from working in the financial industry.

French media calculated that — based on his current salary of €2,300 ($3,150) a month as a computer consultant — it would take Kerviel 177,536 years to pay off the damages.

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