SocGen Staff Demand Kerviel Kompensation
An undisclosed number of the 157,000 staff employed globally by Société Générale , an institution now synonymous with rogue trader Jerome Kerviel, are threatening to sue their employer for 15,000 euros each for “damage and strain” in the wake of the affair.
Although a Paris court held that Kerviel alone was responsible for the 5 billion euro trading loss on his desk — and sentenced him to pay it all back in instalments, a feat that will take 2200 lifetimes — many of his former colleagues reportedly hold a different view.
Maîtres Daniel Richard and Richard Valeanu of the Paris Bar acting for aggrieved staff claim that the bank’s management was properly responsible for the debacle, through lack of supervision. The lawyers told Le Parisien newspaper their customer-facing clients in particular had been “mocked, teased, insulted, disparaged and even threatened” in the months after the affair broke. A legal team December 9 was preparing to lodge papers and details of their claim with the Nanterre court.
The paper said the staff was subject to “undue stress and strain” and matters worsened after the unprecedented sentence ordering the former trader to repay the 4.9 billion euros bank loss, an outcome against which Kerviel has appealed.
The lawyers added: “Staff, especially those in direct contact with customers, experienced some very difficult times in 2008 when the Kerviel affair erupted. They were subjected to ridicule, jeers and threats whenever they declined to make a loan or advance to a customer.”
Société Générale declined to comment on this latest twist in a highly embarrassing affair that has been re-ignited hard on the heels of the (failed) appeal by soccer hero Eric Cantona to crash the banks through a bank run.
The two lawyers told the newspaper that even those not dealing directly with customers were embarrassed by the affair, which regularly hit world headlines.
“Even before Kerviel, public opinion held the world’s banks to be mainly responsible for the global crisis, and those working in finance were made scapegoats. Then nearly two years later, a court sentenced Kerviel to repay 4.9 billion euros and the whole cycle of angry public reaction started all over again, ” said one unidentified former Société Générale trader cited in papers to be filed with the court.
“My life day to day was affected by the case. If, on meeting someone I introduced myself as working at Société Générale , the discussion immediately turned to Kerviel : Is this how you worked ? Don’t you think that making Kerviel pay the equivalent of 150,000 years of wages is shameful? Management must have known what was going on. How can you work in a group that doesn’t know how to control its traders when the stakes are so high ?, etc. etc”, the former employee said. He has now moved to London to work for another bank.
The staff also complain about financial loss as a result of the case. When the Kerviel scandal broke, the bank’s shares collapsed from 87 to 63 euros in less than a fortnight. This continued until they hit 50 euros in July with a direct impact on staff stock options.
The Société Générale share price has subsequently also been hit by fears of sovereign default and the exposure of French banks to Spain and other creditors in Europe. According to one recent audit report Société Générale’s debt exposure to Portugal, Ireland, Greece and Spain is 21% of the total advanced by French banks to these countries.
Story: Ken Pottinger