'Rogue trader' freed on bail after judges drop fraud charges

The alleged rogue trader, Jérôme Kerviel, was freed by two judges last night after being formally accused of breach of confidence, forgery and computer hacking.

The judges dropped two, more serious, accusations sought by prosecutors and ordered M. Kerviel to be released from custody. Prosecutors appealed against that decision but the 31-year- old was freed pending an appeal hearing.

His lawyers hailed as a "victory" the judges' decision to end his custody and drop charges of fraud and "aggravated" breach of confidence. They had earlier alleged that M. Kerviel had been the victim of a "lynching" by his bank. During 48 hours of questioning by fraud investigators, the young trader admitted that he had broken rules and forged documents to evade controls at Société Générale, France's second largest bank, over a period of more than two years.

He told investigators that he wanted to prove himself to be a "super-trader". He insisted, however, that his activities were part of a culture of lawlessness among other SocGen traders which had the bank's broad approval.

M. Kerviel, said that he acted alone and had no intention of despoiling the bank or making a direct, personal profit. He has been accused by Société Générale of losing €4.8bn (slightly less than the €4.9bn initially claimed) through a cat's cradle of genuine and fictitious trades on the European market for shares futures. If proved, that would be by far the largest single sum ever to be lost by the misdeeds of a single trader.

The Paris chief public prosecutor, Jean-Claude Marin, gave the first public account of M. Kerviel's side of the story yesterday. He said that the young man did not seek direct profits but had wanted to prove himself to be "an exceptional trader, a market innovator" within the industry.

The prosecutor also said that M. Kerviel had told investigators that, although he had acted alone, other irregular deals involving fellow traders had taken place since the end of 2005.

"There were other traders who had acted in a similar way by exceeding their trading limits," M. Marin said, summarising the evidence that was given to police by M. Kerviel.

"Eurex alerted Société Générale in November 2007 about the positions that had been taken by M. Kerviel. Questioned by the bank, he produced a fake document to justify the risk cover," M. Marin said.