Soc Gen rogue trader 'an evil genius'

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Former Societe Generale chief executive Daniel Bouton lashed out at rogue trader Jerome Kerviel in court on Tuesday, labelling his unauthorised trades the mark of an "evil genius" that shattered trust at the bank.

Dressed in a pinstripe suit and scarlet-patterned tie, a sombre Bouton told the courtroom of his own inner demons as he discovered Kerviel's "monstrous" trading positions in 2008, which SocGen blamed for a 4.9 billion euro-trading loss ($8.5 billion) and ultimately led to Bouton's departure in 2009.

"It's a catastrophe. It's not an issue of losses or amounts. The trust that should exist between us is shattered," said Bouton, who said his fear upon discovering Kerviel's positions led him to famously accuse the trader of being a "terrorist".

Kerviel's defence team has argued that the trader was a pawn for profit, whose breaches of SocGen's risk controls were tolerated by superiors. The bank insists Kerviel acted alone and egregiously and should be punished.

Bouton told the courtroom in the Palais de Justice that a bank did not do its job by betting on the rise or fall of stock markets and added he was convinced that no supervisor would have tolerated Kerviel's actions.

"I cannot believe for one second any of Jerome Kerviel's supervisors were aware (of his bets)," Bouton said on the 10th day of Kerviel's trial.

Turning to Kerviel, seated behind him, Bouton added, with heavy sarcasm: "I'm sorry, my dear fellow."

"EVIL GENIUS"

Bouton described Kerviel's unauthorised trading as being "outside any remit" and the mark of "an evil genius, but genius nonetheless".

He said Kerviel ought to admit his lies in front of "the bloggers who talk about 'Robin Hood versus the evil bank'".

In response, Kerviel said he had made "errors" and regretted them, but blamed his bosses for encouraging him.

"I am conscious of having gone too far," Kerviel said.

The former trader has previously admitted building up fake covering positions to give the appearance of balancing out risky one-way bets, but has said this was for appearance's sake and must have been known to superiors.

Bouton acknowledged there had been failures in SocGen's risk control system but said Kerviel's ingenuity would have cracked any mechanism.

The ex-CEO said the pressure of dealing with the Kerviel crisis, which forced SocGen to raise capital to avoid collapse, made him "crack" and check into a hospital.

Bouton told the court he had set up a consultancy since leaving SocGen.

After finishing his testimony and leaving the courtroom, the softly spoken Bouton told reporters that Kerviel was not a hero and repeated that his bosses were unaware of his actions.

The former trader risks five years in prison and a 375,000 euro fine if found guilty of charges of breach of trust, computer abuse and forgery. The trial is set to run until June 25.

- Reuters