Rogue trader sues SocGen for unfair dismissal

Bank 'failed to prove he did anything wrong'

By Lester Haines • Get more from this author

Posted in Financial News, 3rd April 2008 10:56 GMT

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Rogue trader Jérôme Kerviel, accused of losing Société Générale €4.9bn (£3.8bn), is to sue his former employer for unfair dismissal, the Times reports.

The 31-year-old, who was last month released on bail from prison after 37 days incarceration on breach of trust, fabricating documents, and illegally accessing computers raps, argues that his ejection from SocGen for gross misconduct is unlawful "because the bank has failed to prove he did anything wrong".

Kerviel's case rests on two points: that his massive gambles on markets were "actually in the black when his bosses stepped in", and that "French labour laws force employers to hold face-to-face meetings with employees to outline the case for terminating their work contract".

Regarding the former, Kerviel's lawyers stress "he was often successful when betting the bank’s money on the stock market and was €1.4bn up at the end of last year". They assert that SocGen was in fact responsible for the whopping loss after executives "took the decision to unwind Mr Kerviel’s positions as shares were tumbling on the world’s markets in January".

The latter point hinges on a "legal technicality". Kerviel's lawyers note that the required meeting is "impossible because Mr Kerviel’s bail conditions forbid him from entering into contact with SocGen staff".

Kerviel's legal team has duly filed papers "arguing that the dismissal process should be cancelled", but the Times understands he "does not envisage a return to his old job as a derivatives operator at SocGen". If he's successful in his claim, SocGen may be forced to pay compensation. ®

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