French trader accused of hacking Société Générale systems

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French trader accused of hacking Société Générale systems

The French trader behind the huge losses at Société Générale used his knowledge of computers to set up dummy accounts and impersonate other users, his former employer alleges.

The bank has released a five-page dossier as a preliminary report on the Jerome Kerviel affair, which involved fraudulent transactions of over US$70bn and eventual losses of US$7bn.

Société Générale claims that Kerviel used his previous work experience on back-office systems to set up hidden trading accounts.

"He had a very good understanding of all of Société Générale's processing and control procedures," the statement said.

Kerviel is also accused of stealing his colleagues' computer access codes to cover his tracks, and of forging documents about trading accounts.

The bank stated that Kerviel began betting on the future state of the stock market last year and was initially successful.

Daniel Bouton, chief executive at Société Générale, said in an interview in Le Figaro that Kerviel tried to cover the gains by picking losing positions, which got out of control.

However, lawyers acting for Kerviel claim that he is being set up as a scapegoat by the bank, which is using him as an excuse to cover up the extent of its losses in the US sub-prime mortgage debacle.
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