Jerome Kerviel beat the system, not the bank. Had Socgen treated him better, the system might never have known.

The newly convicted ‘rogue trader’ Jerome Kerviel has tried very hard – through his lawyers, a book and numerous articles – to portray himself as just a dumb klutz working hard for Societe General….dedicating his life to them, in fact. No fancy car, no fancy apartment: just a lab-rat doing his best in a bank where success was everything, and the only rule was ‘Don’t get caught’.

SocGen itself presents itself – through its lawyers and large PR budget – as the innocent victims of an evil genius, a fraudster mastermind with no thought for anything or anyone but himself: a sociopathic employee who tried to rip the bank off, but got caught.

But it was the French prosecutor who got closest to the truth when, during a key cross-examination, he asked dramatically of the defendant, “Jerome Kerviel – who are you really?” I doubt very much if even the target of the question knows the answer to that.

Kerviel is a hero on the French internet and among Leftist campaigners there. They depict him as the innocent dupe of a bank determined to blame their own stupidity on a patsy. Even The Times today headed its profile, ‘Mr Nobody becomes fall guy for big boys’. Sadly, both the Murdoch press and the blogosphere francais have got it wrong.

Neither Jerome Kerviel nor SocGen told the truth during this trial. A man working selflessly for his ruthless bank does not hide his trades behind false losses elsewhere: there is no way SocGen could’ve benefited from such a policy once the auditors got near it. The accountancy balancing act perpetrated by Kerviel is the smoking gun: why hide from your collaborators what you’re doing? And beyond that, he was a long way from stupid: I watched a French TV interview two years ago in which his former University tutor described him as “an A student in every way…almost a genius with financial systems”.

But equally, SocGen had already rewarded their employee for actions which were decidedly iffy. In fact, my hunch has always been that the moment Kerviel was given a 300,000 euro bonus (when he wanted 750,000)  was the moment he decided to get his own back. SocGen, typically, were both mean and amoral – and the 7.4 billion euro they paid for this error was probably entirely just.

While the bank’s motive was to clear themselves (and, no doubt, pile on another billion of losses while they were at it) Jerome Kerviel’s later motive seems to have been revenge, pure and simple. But in the final analysis, he beat a lunatic trading system in love with light-speed trades and liquidity pools. I have no doubt that, all around the Globe, other traders are pulling off similar stunts right now.

Footnote: The first infamous ‘rogue’ trader – Peter Young of Morgan Grenfell – was found not fit to plead when his case came to Court in 2002. Cross-dresser Young turned up for the trial dressed as a woman and answering to the name of ‘Beth’. He is a diagnosed schizophrenic and now lives in destitute anonomity, I’m told, somewhere in Hull.

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