France authorities detain second banker in massive fraud case

  • France
  • 03/13/2008
  • Kiely Lewandowski - Jurist

A second employee of French bank Societe Generale has been detained in connection with the investigation into fraudulent activity allegedly committed by rogue trader Jerome Kerviel, the bank said Tuesday. A Societe Generale spokesperson did not name the man but did confirm that he is not the same banker questioned in late February. Bloomberg reported that an official involved in the investigation had identified the second banker as Manuel Zabraniecki.

Kerviel has been in custody since February 8 when the Paris appeals court granted a request by prosecutors to hold Kerviel in “provisional detention” to prevent him from fleeing the country or communicating with any possible accomplices during the investigation. Societe Generale, which lost $7 billion when it was forced to unload the fraudulent positions, described the methods Kerviel supposedly used to commit the fraud in an explanatory note. Kerviel has maintained that he acted alone, but also says that he is being made a scapegoat by the bank, which he alleges was aware of his activities. Additionally, BusinessWeek has reported that the Eurex derivatives exchange warned Societe Generale in November 2007 about Kerviel’s unauthorized transactions.