The French government said today that it stands to reclaim a €2.2 billion ($2.46 billion) tax deduction from Societe Generale if an appeal court rules ex-trader Jerome Kerviel should not have to pay damages for losses he caused, according to a Reuters report.
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Kerviel was originally given a 3 year prison sentence in 2010 after accumulating €50 billion ($56 billion) in hidden trades prior to the financial crisis. The positions cost SocGen €4.9 billion ($5.5 billion) to unwind and nearly caused the French bank to collapse. Kerviel was also ordered to repay the money lost by the bank, but subsequent rulings struck down that decision.
Inadequate Internal Controls
At the time, the case proved to be a further embarrassment for SocGen having already admitted inadequate internal controls in 2008 when it was fined €4 million ($4.4 million).
In June, a public prosecutor said the bank "had left the door open" for Kerviel to act illegally after he returned to court when an employment tribunal unexpectedly ordered Societe General to pay him over €400,000 ($448,000) in compensation for unfair dismissal.
The Versailles Court of Appeal will rule on what, if any, damages he should pay later on Friday.
A repayment of the whole €2.2 billion ($2.46 billion) tax break that SocGen benefited from would likely put its 2016 dividend at risk, according to analysts.
The French government said today that it stands to reclaim a €2.2 billion ($2.46 billion) tax deduction from Societe Generale if an appeal court rules ex-trader Jerome Kerviel should not have to pay damages for losses he caused, according to a Reuters report.
Join the industry leaders at the Finance Magnates London Summit, 14-15 November, 2016. Register here!
Kerviel was originally given a 3 year prison sentence in 2010 after accumulating €50 billion ($56 billion) in hidden trades prior to the financial crisis. The positions cost SocGen €4.9 billion ($5.5 billion) to unwind and nearly caused the French bank to collapse. Kerviel was also ordered to repay the money lost by the bank, but subsequent rulings struck down that decision.
Inadequate Internal Controls
At the time, the case proved to be a further embarrassment for SocGen having already admitted inadequate internal controls in 2008 when it was fined €4 million ($4.4 million).
In June, a public prosecutor said the bank "had left the door open" for Kerviel to act illegally after he returned to court when an employment tribunal unexpectedly ordered Societe General to pay him over €400,000 ($448,000) in compensation for unfair dismissal.
The Versailles Court of Appeal will rule on what, if any, damages he should pay later on Friday.
A repayment of the whole €2.2 billion ($2.46 billion) tax break that SocGen benefited from would likely put its 2016 dividend at risk, according to analysts.
