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From The Times

January 23, 2009

SocGen rogue trader Jerome Kerviel 'hit the jackpot' on 7/7

(John Schults/Reuters)

Jérôme Kerviel, right, and his lawyer leave a hearing in Paris after being questioned by magistrates

Adam Sage in Paris

It was a day of carnage that left 56 people dead and a dark shadow for ever cast over the history of London. But for Jérôme Kerviel, the French rogue trader, 7/7 was the jackpot.

Mr Kerviel, whose wild bets on the stock market ended with record losses, celebrated as Britain’s worst terror attack helped him to register a €500,000 profit and to continue a winning streak that brought him “orgasmic pleasure”.

The trader made the confession as he told the newspaper Le Parisien how he had lost touch with reality in the pursuit of money-making at Société Générale, the bank that employed him. It is alleged that his rogue dealings resulted in record losses of almost €5 billion and plunged the 144-year-old French financial institution into crisis.

Mr Kerviel, who was questioned by magistrates yesterday, is under investigation on suspicion of breach of trust, fabricating documents and accessing computers illegally. He faces a maximum sentence of five years in prison if found guilty.

RELATED LINKS

• How the financial system nearly crashed in 2008

• SocGen new accounts dive after trader scandal

The trader, 32, claimed that his colleagues and superiors had been aware of his actions, which brought him the nickname of le cash machine. He painted a damning picture of the bank’s trading room as earnings soared in the years before the financial crisis.

“The best trading day in the history of Société Générale was September 11, 2001,” he said. “At least, that’s what one of my managers told me. It seems that profits were colossal that day.

“I had a similar experience during the London attacks in July 2005.”

A few days earlier he had bet on a fall in the share price of Allianz, the German insurance giant, he told Le Parisien. Everyone was losing money when the 7/7 bombings sent the insurance sector into a downward spiral “except for me”, he said. “Thanks to the positions I had, I earned €500,000 in a few minutes. It was the jackpot. I was jubilant.”

After the celebrations Mr Kerviel said he paused for thought. “I understood that I was having fun when people had just been hit by the bombs. I ran to the toilet and I was sick. But the moment of weakness did not last long. I went back into the trading room and I returned to work.”

Mr Kerviel also spoke of his financial triumphs in the months leading up to the discovery of his unauthorised trades in January last year. “From August to December 2007, I win every day,” he said. “That creates a sort of addiction. A good day for a normal trader is a profit of €30,000 to €40,000. For me, a €1 million day is rubbish. I take crazy risks. And I make astronomic profits which sometimes give me an orgasmic pleasure.”

He denounced his former colleagues as hypocrites for claiming that they had no idea of his deals after he ran up a profit of €1.4 billion in 2007. “I covered the losses of several of my colleagues,” he said.

Mr Kerviel sought to distance himself from his comments after their publication in Le Parisien, saying that they stemmed from a private conversation and were taken out of context. The newspaper said that he met its journalist six times for on-the-record interviews at the request of his lawyers.

Losing bet

2000 Jérôme Kerviel joins Société Générale

January 18, 2008 Bank investigates after transactions raise red flags

January 19 Kerviel begins to admit to unauthorised trading activity

January 20 Total exposure to trades is pinned at €5 billion

January 24 SocGen asks for its shares to be suspended

January 25 Kerviel named as “rogue trader”

Source: Times archives

• HAVE YOUR SAY

And he knew just how to do what was needed to wage economic warfare.... 

maybe? 

His facebook a few months ago put him in Washington DC as a consultant.

Kris Gill, Jawja, United States