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Accused billion-dollar rogue trader charged, freed

  • Story Highlights
  • Preliminary charges against alleged rogue trader Jerome Kerviel don't include fraud
  • Judge frees Kerviel after refusing request he be held longer for questioning
  • Prosecutor: Kerviel admits exceeding credit limit to make trades
  • Societe Generale Bank says Kerviel's trades resulted in $7.2 billion in losses
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PARIS, France (CNN) -- Alleged multibillion-dollar rogue trader Jerome Kerviel was freed Monday after French authorities preliminarily charged him with abuse of confidence and illegal access to computers.

Kerviel, 31, is implicated in what may be the largest securities fraud case against an individual. Banking giant Societe Generale has said Kerviel's trades for the firm resulted in $7.2 billion in losses.

But Kerviel's attorney claimed victory Monday because the preliminary charges failed to include fraud. Judge Renaud Van Ruymbeke refused a prosecutor's request for Kerviel to continue to be held for questioning.

"He is free," said Kerviel's lawyer Christian Charriere-Bournasel. "He is free and he has been cleared of the charge of fraud, which has been repeatedly emphasized by the Societe Generale Bank."

However, lawyers said that Kerviel, if found guilty of the abuse of confidence charge, could be sentenced to seven years in prison.

Societe Generale Bank shares fell nearly 4 percent to €70.94 (about $104) Monday, according to The Associated Press. Video Watch more about Kerviel »

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Kerviel has been cooperative and has admitted exceeding his credit limit in order to make fraudulent transactions involving European index futures, said Paris prosecutor Jean-Claude Marin.

"I exploded my credit line," Marin quoted Kerviel as saying about the loss, the largest by an individual in the securities business.

Marin requested that Kerviel be charged Monday because, under French law, a suspect may be held for only 48 hours without charge. That deadline expired Monday afternoon.

The prosecutor told reporters earlier Monday he would ask the judge to require Kerviel be detained so police could question him more fully, but that request was denied.

Van Ruymbeke, a judge with the financial section of the Paris tribunal, has presided over a number of high-profile cases.

In announcing the incident last week, Societe Generale said Kerviel alone was responsible. Marin said Monday that investigators and prosecutors support that theory, though they continue to search for any accomplices Kerviel may have had.

"The investigation shows very clearly at the moment that Mr. Kerviel acted alone and the investigation has not demonstrated any complicity," Marin told reporters.

Kerviel also told police the bank felt he was doing such a good job last year he was anticipating getting a €300,000 (about $440,000) bonus before the alleged scheme's unraveling, Marin said.

He said Kerviel also told investigators his actions were no different from those of other traders -- except he got in over his head.

"He hoped to be seen as an exceptional trader, a man able to predict the market and he hoped to get a bigger bonus," Marin said.

Neither the prosecutor nor the bank has accused Kerviel of having profited from his alleged crimes.

Societe Generale CEO Daniel Bouton told Europe-1 radio he rejected suggestions by Kerviel's attorneys that the bank was using the trader to cover up its losses, AP reported.

"How could you want to imagine that we would have been able to hide a hole by another hole? It's completely stupid," Bouton told Europe-1 radio, according to AP.

Bouton called Kerviel a "remarkable concealer" who cleverly manipulated the bank's risk control systems by using real and fake positions, according to AP.

"That's what created this gigantic fraud," he said, according to AP.


Elisabeth Meyer, another defense lawyer, told AP her client's trades had been profitable through the end of last year.

"In my view, he was thrown to the lions before being able to explain himself," Meyer told AP. "It's a lynching." E-mail to a friend E-mail to a friend

CNN's Jim Bittermann and Niki Cook contributed to this report.

Copyright 2008 CNN. All rights reserved.This material may not be published, broadcast, rewritten, or redistributed. Associated Press contributed to this report.

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