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Société Générale may face a US inquiry on its handling of the rogue trader scandal that cost the company €4.9bn ($7.2bn).

The US Securities and Exchange Commission wants to see if the French bank violated US laws in the way it unwound its position after it was dropped in a hole by rogue derivatives trader Jérôme Kerviel.

It has yet to be determined how and why Kerviel, a junior trader, secretly built up huge and risky positions in the derivatives market. The SocGen affair is the focus of five inquiries in France as well the possible SEC probe. Separately, the US attorney in Brooklyn is investigating the possibility that a leak of insider information prompted stock sales ahead of SocGen’s announcement of the disaster on 24 January.

Senior European Union politicians yesterday attacked SocGen for "abject carelessness" in failing to prevent the biggest rogue trader losses in financial history. Charlie McCreevy, the EU’s internal market commissioner, said SocGen had ignored warnings from Eurex, a leading derivatives exchange, over trades conducted by Kerviel.

A former inspector of trading operations at SocGen said his team was under-resourced, at least during his watch. "Inspectors do not have enough power in the bank, we are not given the time we need, or the means to check things out," Maxime Le Grand told AFP. SocGen strongly disputes this criticism.

Kerviel appears to have acted alone in sinking his employers into a huge hole. He joined the bank as a developer in 2000 working on the middle office systems that control how much a trader, or group of traders, can risk.

The role gave Kerviel the knowledge of how to manipulate the system when he became a junior trader in 2005. His role as a hedger involved covering the bank's exposure to large losses by taking positions opposite to those taken out by more senior traders. Trading limits in the order of tens of millions of dollars ought to have been applied, but Kerviel circumvented these controls.

Société Générale's own explanation of how the fraud took place, and the sequence of events leading up to its discovery, can be found here.

Kerviel admits to gaming the systems, but claims he was only working to increase bank profits. His lawyers say he's being used as a scapegoat for a wider range of problems at the bank, which has, they say, been hit particularly hard by America's sub-prime mortgage crisis.

Kerviel was charged with abuse of confidence and hacking offences on 28 January and released on bail. An investigating magistrate rejected prosecution attempts to charge him with fraud, CNN reports. ®

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