Societe Generale wrote off €1.7bn in tax over rogue trading losses

Societe Generale has used Jerome Kerviel’s €4.9bn trading loss to reduce its tax bill by €1.7 billion, news reports have claimed.

Nicolas Dupont-Aignan, a French politician, criticised the bank saying that “taxpayers shouldn't be made to pay for financial speculation”.

However, the French bank has claimed it acted appropriately and did not break any fiscal regulations.

Last week a French court found Jerome Kerviel guilty of unauthorised computer use, fraud and breach of trust and ordered the ex-trader to pay back €4.9 billlion which the bank lost through his actions.

The trader was also given a life ban from working within the financial services industry and a three-year prison sentence.

Following the verdict, Mr Kerviel said in an interview with Europe1 radio that he felt “crushed” by the ruling and compared it with being “hit on the head with a club”.

On his current salary, of €2,000 per month as an technology analyst, it would take the former trader approximately 177,000 years to repay the losses.

Olivier Metzner, lawyer for Mr Kerviel, has criticised the court’s verdict and announced that an appeal to overturn the decision will be launched.

Societe Generale has now said it does not expect the former banker to pay back the entire sum.

Jerome Kerviel sentenced to jail over SocGen scandal

Former Societe Generale trader guilty of "breach of trust." Five-year sentence — two of it suspended — reportedly handed out, along with staggering €5 billion fine.

The SocGen trading scandal first came to light in early 2008 when the bank shocked markets with the news that Kerviel had placed €50 billion of bets on stock-market futures — more than the entire market capitalization of the bank at the time.

Unwinding those bets in a hurry resulted in losses of €4.9 billion for the firm and is also thought to have contributed to a slump in global equity markets. Kerviel himself wasn’t accused of profiting directly from his trades.

Kerviel’s lawyer Olivier Metzner reportedly said the former trader, now a computer consultant, will appeal the decision. French media reported that Kerviel now earns €2,300 a month in his new job — so assuming he had no other expenses, he could pay off the debt in just over 177,000 years.

Kerviel to Stand Trial on Societe Generale Trading Loss in June

(Bloomberg) -- Former trader Jerome Kerviel will stand trial for his role in Societe Generale SA’s 4.9 billion- euro trading loss in June, a Paris court said today.

Société Générale - Timeline of Fraud

A look at how Societe General's trading scandal unfolded:

- 2000: Jerome Kerviel joins Societe Generale, working in offices that monitor trades.

- 2005: Kerviel promoted to more glamorous arbitrage trading desk, where his job consisted of making profits from small differences in prices between different markets.

- Late 2006: Kerviel begins making transactions that the bank now says were apparent precursors to the alleged massive fraud.

- Jan. 18, 2008: Bank launches an emergency in-house investigation after Kerviel's transactions begin raising red flags.

- Jan. 19: Kerviel called to Societe Generale to explain. Bank says he eventually confirms fictitious trades.

- Jan. 20: Bank team works overnight to identify the exposure. CEO Daniel Bouton notifies Bank of France.

- Jan. 21: Bank starts quickly and quietly unwinding positions in European markets.

- Jan. 23: Position closed or hedged.

- Jan. 24: Societe Generale alleges the "massive" fraud cost 4.9 billion euros ($7.09 billion).

- Jan. 25: Bank apologizes to shareholders in newspaper ads. Police search Kerviel's apartment.

- Jan. 26: Police take Kerviel into custody.

- Jan. 27: The bank says Kerviel "combined several fraudulent methods" to cover his tracks, such as falsifying documents and swiping computer access codes. It says he bet 50 billion euros ($73.53 billion) - more than the bank's net worth - on futures contracts at three European equity indices. Defense attorney bank is making scapegoat of Kerviel to hide losses on U.S. mortgages.

- Jan. 28: Prosecutor requests preliminary charges of forgery, breach of trust and fraud against Kerviel, and says Kerviel could face up to seven years if convicted. Kerviel is released from custody on condition he remain in France.