Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Prosecutor seeks fraud charge for rogue trader

French prosecutor vows to appeal judge's decision to forgo fraud charges against trader Jerome Kerviel.

Subscribe to International
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)

France rogue trader charged
Securities trader Jerome Kerviel out of jail but facing charges in $7-bil French bank fraud case. Jim Bittermann reports

PARIS (CNN) -- The French prosecutor who sought charges against trader Jerome Kerviel for a $7.2 billion loss at Societe Generale said Tuesday he plans to appeal a judge's decision to throw out a charge of fraud.

Judge Renaud Van Ruymbeke on Monday filed preliminary charges of abuse of confidence and illegal access to computers against the 31-year-old trader, but he did not agree to charge Kerviel with fraud.

Paris prosecutor Jean-Claude Marin said he plans to appeal the judge's ruling to a higher court, which could reinstate the fraud charge.

The abuse of confidence charge could bring a maximum sentence of three years in prison, lawyers have said, because it is a non-aggravated charge. Had the charge been aggravated, it would have brought a maximum of seven years behind bars.

The judge freed Kerviel under judicial control after Monday's hearing. Kerviel's lawyers have not said where their client is now.

Societe Generale announced last week that Kerviel was responsible for the massive fraud at the bank. It said he had exceeded his trading limits and made fraudulent transactions involving European index futures.

The bank and Marin have said they believe Kerviel acted alone.

But French President Nicolas Sarkozy said Monday that the bank's management had to take responsibility for its acts, indicating he wants the bank's board to take strong action against senior management when it meets Wednesday.

French Finance Minister Christine Lagarde has said she wants the board to decide the fate of bank Chairman and Chief Executive Daniel Bouton.

The bank's shareholders have filed a legal complaint seeking to find out what role Societe Generale may have played in the fraud.

London's Financial Times reported Tuesday that the Eurex derivatives exchange became concerned about Kerviel's trading positions as early as November 2007 and alerted Societe Generale (SCGL.Y).

If the report is true, shareholders and the board will want to know why the bank did not reveal Kerviel's activity and the staggering loss until last week.

Marin said Kerviele told investigators he knew he was doing wrong, but that his actions were no different from those of other traders. Kerviel, said Marin, said he simply got in over his head.

CNN's Jim Bittermann contributed to this report. To top of page

Photo Galleries
Top luxurious hotel suites for business travelers For many people, you can't put a price on comfort. More
Million-dollar startups: These firms scored big sales their first year Their first year in business, these companies generated $1 million in sales. More
The 10 best states for retirees It might be worth moving to a new place to find your dream retirement home. Check out these 10 states. More