French justice has spoken!

Jerome Kerviel, the young trader who managed to cause Société Générale 5 billion euros in losses has been declared guilty.

The charges: '"abus de confiance", "faux et usage de faux" et "introduction frauduleuse de données dans un système informatique"-- breach of trust, forgery and fraudulent data entry.

Kerviel's defense tried unsuccessfully to prove that his bosses at Société Générale knew about his trades, but this was rejected by the court. (Ignorance really is bliss. Especially since "Kerviel had been placing bets outside his trading limit for more than two years. The bank has said it booked 1.4 billion euros in profit in the fourth quarter of 2007 from his unauthorized dealings."- NYT)

The Tribunal stated that Kerviel's acts had "hurt the world economic order" and condemned him to three years in prison and the repayment of 4.9 billion euros.

According to Le Monde, Kerviel sat "pale in his dark suit" when the verdict was announced.

You'd be pale too if you had calculated, as Le Monde did, that at at 2300 monthly salary, payment would take 170,000 years !

Mr. Kerviel's lawyer called the ruling "unreasonable" and said he planned to appeal.

The court's decision should feed speculation in a multitude of areas. Financial regulation. The culture of excessive risk. The importance of having bosses with some idea of what they're doing. French justice (Kerviel was really the ONLY person charged?) And, of course, for HR directors, the risks of hiring from outside the grandes écoles.

FLASH: French taxpayers pay Société Générale 1.6 BILLION euros in tax deduction for extraordinary losses !







