By Gregory Viscusi and Carol Matlack
May 4 (Bloomberg) — Former trader Jerome Kerviel, who goes on trial in June for his role in Societe Generale SA’s 4.9 billion-euro ($6.7 billion) trading loss in 2008, says in a book that his superiors were well aware of his bets.
“On several occasions, starting in April 2007, my superiors were alerted by the back office of the existence of fictitious operations within my area of responsibilities, but they never made any attempt to stop these practices nor did they come ask me the slightest question,” says Kerviel in “The Spiral: Memoirs of a Trader.”
The book, published by Flammarion SA, officially goes on sale tomorrow. The trial will be held from June 8 to June 23.
Kerviel, 33, has been charged with abuse of trust, faking documents and hacking into the bank’s computer system to input false information. He faces as many as five years in prison and a 375,000-euro fine if found guilty.
Kerviel admitted faking positions in order to give the appearance that he’d hedged unauthorized bets on stock index futures. He says his superiors knew what he was doing and only stepped in when his bets went wrong.
In the book, he says he made 790 million euros for the bank in July 2007 through unhedged trades. “They were dealt with and registered by the competent authorities without any further investigation,” he says.
He also denies that he usurped anyone else’s identity when faking the hedges. He entered false trades into Societe Generale’s system under his own password, “as did other colleagues, though I admit I did it to a greater extent,” he wrote.
Societe Generale says it only discovered Kerviel’s positions in January 2008 and made the loss, the biggest trading loss by a bank, as it unwound them.
“Jerome Kerviel admits his misdemeanours, which he has also confessed to the police and judges, but is seeking to use the weaknesses in the bank’s control systems as proof of complacency or even encouragement by his superiors,” the Paris- based bank said in a statement posted yesterday on its website.
“Societe Generale is now waiting for the start of the trial and for an exemplary sentence,” the bank said.
Laura Schalk, a Societe Generale’s spokeswoman, declined to comment specifically on Kerviel’s book when reached by phone.
To contact the reporter on this story: Gregory Viscusi in Paris at firstname.lastname@example.org
Last Updated: May 4, 2010 10:19 EDT