More On Legal & Compliancefrom The Advisor's Professional Library
- Updating Form ADV and Form U4 When it comes to disclosure on Form ADV, RIAs should assume information would be material to investors. When in doubt, RIAs should disclose information rather than arguing later with securities regulators that it was not material.
- Regulatory Oversight of Investment Advisors Although the regulatory environment is in a state of flux, it is imperative that RIAs adhere to their compliance obligations. To ensure compliance, RIAs and IARs must fully understand what those obligations are.
The 2010 verdict by a French court finding Jerome Kerviel solely responsible for Société Générale's trading losses of 4.9 billion euros ($6.34 billion) in 2008 was upheld Wednesday by a Paris appeals court.
Bloomberg reported Wednesday that the decision by Judge Mireille Filippini upheld the earlier verdict, which found that Kerviel was guilty of abusing SocGen’s trust, faking documents and entering false data into the computers.
Kerviel had argued that the bank was aware of the actions he took beyond his authority, and further, was scapegoating him for its 2008 subprime mortgage market loss—one of the largest in history. The loss was so massive that it obliterated nearly two years of pretax profit at the bank’s investment banking unit.
In his quest for exoneration, Kerviel changed his defense lawyers and even filed criminal complaints against SocGen prior to the appeal hearings. As the appeal went forward, his lawyers asserted that the bank had used Kerviel, letting him make unauthorized trades to hide its jeopardy from the subprime mortgage market in the U.S.
In response, SocGen charged defamation and the judge actually argued openly with Kerviel’s lawyer, David Koubbi. At one point, citing his treatment of witnesses, the judge threatened him with action from the bar association.
Koubbi was quoted saying after the ruling was issued, “We strongly defended Jerome Kerviel and despite the new elements that we brought forward, nothing changed their mind. We will continue to defend him against what has been a great injustice.”
The prosecution asked Filippini to raise Kerviel’s sentence from the three years cited in the 2010 verdict to the maximum of five years.