French bank SocGen ordered to pay rogue trader for wrongfully firing him

PARIS (Reuters) - A "rogue trader" who cost French bank Societe Generale SOGN.PA billions of euros in losses won a wrongful dismissal case on Tuesday when a labor court ordered Jerome Kerviel's former employer to pay him 450,000 euros ($510,000) in compensation.

Former trader Jerome Kerviel leaves the courthouse in Paris, France, March 21, 2016. REUTERS/Charles Platiau

The court, made up of equal numbers of representatives of employers and trade unions, ruled that the bank fired Kerviel without “real and serious cause” because it waited too long to dismiss him after becoming aware of his misconduct.

SocGen lawyer Arnaud Chaulet branded the ruling “scandalous” and said the bank would appeal against a decision he said ran counter to the law.

Kerviel, 39, was sentenced to three years in jail after being convicted by a Paris court in October 2010 for breach of trust and fraud in the loss of 4.9 billion euros in equity derivatives trades that went terribly wrong in 2008.

Tuesday’s ruling seemed bound to fuel controversy over the role of labor courts after the Socialist government dropped an attempt this year to limit by law the amount of damages they can award for wrongful dismissal.

The trader has never denied masking his 50 billion euro positions, but contends his managers should have been aware of his actions, something the bank has always strenuously denied.

France’s labor code gives companies two months to sanction misconduct, but the tribunal found that his positions had been known since 2007 whereas Kerviel was dismissed in February 2008, his lawyer David Koubbi said.

Koubbi told Reuters the decision “restores justice and tears apart the story that Societe Generale has presented from the beginning”.

The ruling comes as Kerviel faces a separate civil case due to start next week before an appellate court in Versailles about how much he has to pay the bank towards the losses.

France’s highest court of appeal upheld Kerviel’s jail sentence in March 2014, but ruled that he was not liable for 4.9 billion in damages sought by the bank, opening the way for the civil trial to determine a fine.

($1 = 0.8819 euros)

(This story is corrected to fix spelling of lawyer’s name in paragraph 3)

Additional reporting by Sophie Louet and Julien Ponthus; Writing by Leigh Thomas; Editing by Paul Taylor and Mark Trevelyan