Disgraced trader Jerome Kerviel damages slashed to €1m from €4.9bn

Kerviel had amassed €50bn in stock market bets using fake hedges and false documents.

(AP)

A French court has cut the damages owed by rogue trader Jerome Kerviel from €4.9bn (£4.2bn) to just €1m (£860,000).

The court in Versailles, outside Paris, ruled on Friday that Kerviel was “partly responsible” for massive losses suffered in 2008 by his former employer Societe Generale through his reckless trades.

Kerviel has consistently maintained that bosses at the French bank knew what he was doing all along.

In June, a public prosecutor said the bank “had left the door open” for Kerviel to act illegally.

The disgraced trader was sentenced to three years in prison for nearly breaking the bank with record losses, just before the financial market meltdown in 2008.

The 39-year-old has been found guilty of forgery, breach of trust and fraudulent computer use for covering up bets worth €50bn – more than the market value of the entire bank at the time.

Kerviel had amassed the stock market bets using fake hedges and false documents before the French bank discovered them in January 2008. Societe Generale unwound the positions at a loss of €4.9bn, prompting Daniel Bouton, the bank’s chief executive to label Kerviel a “terrorist”.

Kerviel has attempted to cast himself as the victim of a corrupt financial system, claiming bank bosses were fully aware of the bets he was making and only voiced concern when they started losing money.

He served five months of his three-year sentence for abuse of trust.

In June, an employment tribunal awarded Kerviel half a million dollars for unfair dismissal. Two weeks later, a prosecutor criticised Societe Generale for “multiple, long-standing” failings.

If Societe Generale is ultimately found responsible for faults in handling the Kerviel case, the French government could ask the bank to pay back the €2.2bn tax credits it gave the firm to compensate for the trader's losses.