French bank Société Générale detailed yesterday how a trader evaded all its controls to bet some €50 billion - more than the French bank's market worth - on European markets, saying he hacked computers and used other "fraudulent methods" to cover his tracks, causing billions in losses.
The bank says the trader, Jerome Kerviel, did not appear to have profited personally from the transactions and seemingly worked alone - a version reiterated by Jean-Pierre Mustier, chief executive of the bank's corporate and investment banking arm.
But, speaking with reporters, Mr Mustier added: "I cannot guarantee to you 100 per cent that there was no complicity."
Officials have said Mr Kerviel is co-operating with police, who were expected to hold him for a second day of questioning until today when he could face charges.
The head of the financial section of the Paris prosecutor's office, Jean-Michel Aldebert, said the questioning of Mr Kerviel was "going very well and the investigation led by the specialists of the financial police is extremely fruitful".
"He's feeling fine, he's collaborating and ready to explain himself," Mr Aldebert added.
He said Mr Kerviel (31) gave himself up voluntarily. He was taken into custody on Saturday afternoon. Police were questioning him about allegedly fraudulent trades that Société Générale, France's second-largest bank, says cost it billions of euros in jittery markets.
Mr Kerviel has not been seen in public since the bank said on Thursday that his unauthorised trades lost it €4.9 billion.
In a five-page document, Société Générale sought to counter the notion that it had disrupted markets by hurriedly selling off the massive positions that Mr Kerviel built up, allegedly without authorisation.
The bank took three days last week to sell off the contracts on the Eurostoxx, DAX and FTSE indices, but said it had done so in a "controlled" way.
Société Générale said Mr Kerviel misappropriated other people's computer access codes, falsified documents and employed other methods to cover his tracks - helped by his previous years of experience when he worked in other offices at the bank that monitor traders.
The bank said Mr Kerviel built up two portfolios of investments - but that one of them consisted of "fictional operations", leaving the bank hugely exposed.
"In order to ensure that these fictitious operations were not immediately identified, the trader used his years of experience in processing and controlling market operations to successively circumvent all the controls which allow the bank to check the characteristics of the operations carried out by its traders," the statement said.
The bank said Kerviel had built up a position worth €50 billion - far more than the bank's market capitalisation of €35.9 billion. He had been betting on how the markets would perform at a future date. - (AP)
