'Rogue trader' suspect held
Saturday, 26 Jan 2008 20:05
Nicolas Sarkozy doubts impact of Societe Generale fraud, blamed by media upon Jerome Kerviel
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Suspected rogue trader Jerome Kerviel has been arrested, judicial officials have said.
The 31-year-old is suspected of being behind the €4.9 billion (£3.7 billion) defrauding of Societe Generale (SG) announced on Thursday.
Mr Kerviel had reportedly been staying with his mother in the Paris area but is now in police custody, according to reports. He can be held for 24 hours without charge before a judge's permission for extension is required.
Yesterday police raided the SG headquarters and the flat believed to be occupied by Mr Kerviel in the affluent Neuilly-sur-Seine suburb of Paris.
SG discovered the fraud, "exceptional in its size and nature", on January 19th and 20th. It said the employee responsible had been suspended and would be dismissed, while those responsible for him would "leave the group".
Before news of the arrest a police spokesperson told the Reuters news agency: "It is necessary for the police to familiarise themselves with the evidence before carrying out questioning."
French president Nicolas Sarkozy said the €4.9 billion (£3.7 billion) fraud would not affect the "solidity and reliability" of economic conditions in the
European country yesterday.
"You can't assimilate an internal problem at SG, which is the result of a large scale internal fraud, with what has happened in the international financial system and which comes from the US," Mr Sarkozy, speaking from New Delhi during a state visit to India, said in reference to the global credit crunch.
The news came a week after SG admitted it had suffered a €2 billion (£1.49 billion) loss following the collapse of the US subprime market.