Watch French trader gets 3 years in jail, must pay $6.7B

French trader gets 3 years in jail, must pay $6.7B


PARIS - Ex-trader Jerome Kerviel, speaking for the first time Wednesday about his tough sentencing in history's biggest rogue trading scandal, insisted he is a scapegoat for his former bank and compared the penalty to getting "hit on the head with a club."
The 33-year-old was convicted Tuesday, sentenced to three years in prison and ordered to pay his former employer damages of euro4.9 billion ($6.7 billion) - the equivalent of 20 Airbus A380 superjumbo jets.
"I'm starting to digest it, but I'm nonetheless crushed by the weight of the sanction and the weight of responsibility the ruling places on me," Kerviel told Europe-1 radio.
Kerviel maintained in court that the bank and his bosses tolerated his massive risk-taking as long as it made money - a claim the bank strongly denied, saying he took great pains to cover up his actions.
"I have the feeling they wanted to make me pay for everybody and that Societe Generale had to be saved," he said.
Of the verdict, he said: "It's difficult, obviously, when you get hit on the head with a club that way."
Kerviel is appealing the ruling and says he hopes in the new trial "to prove once and for all that I wasn't the only one in the boat."
The bank says Kerviel made bets of up to euro50 billion - more than the bank's total market value - on futures contracts on three European equity indices, and that he masked the size of his bets by recording fictitious offsetting transactions.
The euro4.9 billion figure is the sum the bank says it lost unwinding Kerviel's complex positions in January 2008. It's a sum nobody realistically expects him to repay.
Kerviel said he is currently making about euro900 ($1,245) a month working part-time as a computer consultant - he reduced his hours to concentrate on the trial.


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US security firm 'to pay $42m fine'

Enjoy US security firm 'to pay $42m fine'


By agreeing to pay the fines, Xe avoids criminal charges over violations of US export rules

The private security contractor previously known as Blackwater, has agreed to pay $42m in fines for hundreds of violations of US export rules, according to the New York Times.

The violations included illegal weapons exports to Afghanistan, making unauthorised proposals to train troops in southern Sudan, and providing sniper training for police in Taiwan, the newspaper said on Friday.

The New York Times reported that by reaching the agreement with the US state department to pay the fines, the company avoids criminal charges over the violations of US export control regulations.

Name change

Blackwater, which provided guards and services to the US government in Iraq, Afghanistan and elsewhere, changed its name to Xe in 2009.

Paying the fines will allow Xe to continue to compete for government contracts, the New York Times said.

US export rules mandate government approval for the export of certain types of US military technology or knowledge.

But Xe "began to seek training contracts from foreign governments and other foreign organisations without adhering closely to American regulations", the newspaper reported.

It "also shipped automatic weapons and other military equipment for use by its personnel in Iraq and Afghanistan in violation of export controls, and in some cases sought to hide its actions", the New York Times said.

Black market

According to the daily, investigators were also looking at whether weapons shipped to Iraq were sold on the black market, ending up in the hands of the Kurdistan Workers' Party (PKK) that is fighting for independence from Turkey, a group considered by the US to be a terrorist organisation.

However, the settlement does not resolve other legal troubles still facing the company and its former executives and other personnel, the newspaper said.

Those issues include the indictments of five former executives on weapons and obstruction charges, a federal probe into whether company officials tried to bribe Iraqi officials, while at least two former employees face murder charges after two Afghans died in Kabul in May 2009.

A US court dismissed charges against former Blackwater guards accused of killing 14 Iraqi civilians in Baghdad in 2007.

Guilty pleas

A federal investigation into the company's weapons shipments to Iraq brought guilty pleas from two former Blackwater employees.

By paying fines instead of facing criminal charges on the export violations, the company will be able to continue to receive government contracts, according to the New York Times.

The newspaper quoted a company spokeswoman confirming the settlement but a state department spokesman declined to comment.

The New York Times noted that the company lost its largest federal contract last year, providing diplomatic security for US embassy personnel in Baghdad.

But it still has contracts to provide security for the state department and CIA in Afghanistan, the daily said.
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