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Ex-trader Kerviel admits to fake client "Matt"
June 15, 2010 / 5:24 PM / 7 years ago

Ex-trader Kerviel admits to fake client "Matt"

* Kerviel says lied to broker about fake client “Matt”

* Kerviel used rugby-loving “Matt” to cover risky bets

* Broker acknowledges traders have to follow rules

By Thierry Leveque

PARIS, June 15 (Reuters) - Former Societe Generale (SOGN.PA) trader Jerome Kerviel admitted on Tuesday to creating a fake client called “Matt” to cover massive unauthorised bets with a broker.

33-year-old Kerviel told the court on the sixth day of his trial how he had lied to broker Moussa Bakir about the driven, rugby-loving “Matt”, who worked for a hedge fund, in response to Bakir’s questions about his trading strategy.

Bakir had earlier told the court that Kerviel claimed his risky bets were the result of pressure from “Matt”, whose aim was to make a billion in profit.

“I told him a fib ... (Bakir) wanted to know what my underlying strategy was,” said Kerviel, who risks five years in prison and a 375,000 euros ($503,100) fine if found guilty of charges of breach of trust, computer abuse and forgery.

Bakir, a broker for Fimat, told the court Kerviel’s trades had brought him a bonus of 1 million euros. He said the aim of a trader was to make money, but acknowledged one “had to follow the rules”.

SocGen blames Kerviel for 4.9 billion euros in trading losses in early 2008 that brought the bank close to collapse. It argues he acted alone and without the knowledge of his bosses.

The bank is trying to move on from the scandal with a new management team and strategic plan, which it unveiled at an investor event on Tuesday. [ID:nLDE65E0F0]

Kerviel admits building up unauthorised positions worth an estimated 50 billion euros but insists his superiors knew what he was doing and tolerated breaches of risk controls.

Kerviel’s trial is due to run until June 25. (Writing by Lionel Laurent; Editing by Erica Billingham) ($1=.7453 Euro)

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