Court awards over $500K in wrongful dismissal case to rogue trader who cost bank nearly $7B
A rogue trader who cost the French bank that employed him some $7 billion has been awarded over $500,000 in a wrongful dismissal case.
A French labor court said Société Générale must have known what Jerome Kerviel was doing, so blaming him for the adverse consequences that ensued and firing him belatedly at that point was unfair, according to BBC News, Reuters and the Wall Street Journal (sub. req.).
Unlike the U.S., many European countries do not follow an employment-at-will doctrine that generally permits workers to be let go at any time, and the French court said Kerviel’s termination occurred without “real or serious cause.”
A lawyer for the bank called the ruling “incomprehensible” and said it will appeal.
The 39-year-old Kerviel previously served three years for breach of trust and fraud convictions related to the 2008 trading loss and unauthorized computer use, but was not required to pay restitution to the bank in the criminal case.
The $511,000 award represents damages for unfair dismissal and part of a 2007 bonus, the Wall Street Journal reports.
“This is the first time that a French court recognizes that Société Générale knew about Mr. Kerviel’s trades,” said attorney David Koubbi, who represents Kerviel. “This is a turning point.”
An appeals court in Versailles is about to decide whether Kerviel has any responsibility to repay the bank for the trading losses, in a civil case.
Related coverage:
Bloomberg: “Kerviel Sues SocGen for 5.7 Billion Euros Over 2008 Firing”
ABAJournal.com (2008): “Bank’s Loss of $7.2B Could Mean Big Bucks for Rogue Trader”
The Guardian (2014): “French court upholds rogue trader Jérôme Kerviel’s prison sentence”
