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19 April 2024

‘Scapegoat’ Kerviel tries out the Leeson defence

By Frank Kane

We are quickly getting through the dictionary of animal metaphors in the Société Générale scandal. After the “rogue” trader we now have the “scapegoat”. How long before we get to the “sacrificial lambs” and then the “dead ducks”, or even the “jail birds”?


It is all so familiar. Those who remember the Barings case in 1995 will have experienced a distinct sense of déjà vu when they heard Jerome Kerviel’s (pictured above) first utterances since he was revealed as the man who cost the bank five billion euros (Dh27bn) as a result of unauthorised positions in the equity derivatives market.

Nick Leeson, the Barings rogue, put up a very similar defence. Yes, he admitted, he had traded illegally and run up liabilities of $1.7bn, enough to bust the 200-year-old bank. But there was never any question of personal gain from these gigantic sums (apart from his comparatively modest bonus). If he had been better supervised, it would not have happened.


Kerviel’s lawyers must have studied the Leeson defence before their client delivered it: “I am taking my share of responsibility, but I will not be the scapegoat. I never had any personal ambitions in this affair. The aim was to earn money for the bank”.


The investigation, and presumably also a criminal hearing, will examine all this in depth.


No doubt those will find culpability at several layers in SocGen. But I cannot help thinking it is a bit like a bank robber blaming the police for not preventing him as he pulled out a gun at the counter and walked off with the loot.