The New York Times-20080126-French Trader Is Remembered As Mr- Average
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French Trader Is Remembered As Mr. Average
Jerome Kerviel was too middling to be considered a loser. Until he was charged by Societe Generale with perpetrating the biggest fraud of its kind in banking history, there was nothing superlative about him.
He failed in a bid for town council in his 20s; he never rose higher than a green belt, a midlevel rank, after years of judo training -- because of his bad knees; and he attended an average college where he earned respectable but unremarkable grades.
People who want to be golden boys or clever in the market don't come here, said Valerie Buthion, the director of the University of Lyon's economic and financial engineering department, where Mr. Kerviel earned a master's degree in market finance. The showoffs don't come.
As they sought to explain how a low-level trader caused a $7.2 billion loss, Mr. Kerviel's former bosses at Societe Generale, one of France's oldest and most venerated banks, portrayed him as a brilliant trader who eluded sophisticated detection systems.
But the mundane outlines of the life of Mr. Kerviel, 31, betray no flashes of brilliance. Rather, the portrait of him painted by those who knew him shows a reserved man who most often blended into the background.
His less-than-impressive persona has led to doubts that he could be the sole culprit in the bank's enormous losses. Despite a lack of evidence, some financial experts, especially in France, have suggested that Mr. Kerviel might be a scapegoat for other losses incurred by Societe Generale, some perhaps related to subprime mortgages.
Mr. Kerviel's 100,000-euro salary ($147,000) as a trader was paltry compared with salaries of his colleagues, and in 2006 he received only a 1.5 percent raise.
Traders who worked with Mr. Kerviel said he was quiet and low key -- smart, but hardly a computer genius. When the news broke, I saw his photograph and thought, no, it's not possible. It couldn't be him, said one junior trader who worked with him and did not want to be identified because he was not authorized to speak to the media.
The son of a hairdresser and a vocational school metal shop teacher, who died about two years ago, Mr. Kerviel was born in Pont-l'Abbe, a small town on Brittany's fog-enveloped coast.
He lived there until going to college, the town's mayor, Thierry Mavic, told The Telegramme of Brest, in Brittany. He was a poised, calm, reflective young man. A little reserved, Mr. Mavic said.
Mr. Kerviel completed his undergraduate studies in Nantes and then attended the University of Lyon for graduate school. The university opened more than 10 years ago backed by major French banks, with the express purpose of training students for the unglamorous middle and back-office functions of processing and monitoring trades.
He was a student just like the others, a young man, and he didn't distinguish himself from the others, said one of his former teachers, Gisele Reynaud, who taught Mr. Kerviel how to track and monitor trades.
Like many of his classmates, Mr. Kerviel got his professional start with a paid internship at Banque Nationale de Paris. He joined Societe Generale in 2000.
Pont-l'Abbe's mayor, Mr. Mavic, thought so much of Mr. Kerviel that he invited him to join him on his list of candidates to run in municipal elections in 2001. (You do not have to live in a town in France to be on its city council, or even to be its mayor.)
Mr. Mavic told The Telegramme that Mr. Kerviel did not get enough votes to win a seat.
Mr. Kerviel's former judo teacher, Philippe Orhant, said he taught him judo for more than six years and that Mr. Kerviel later taught martial arts to children. He worked well with people, recalled Mr. Orhant, who said that he ultimately dropped out of the sport with a green belt because of medical problems with his knees.
With publicity intensifying about the reclusive former trader, grim family members in Pont-l'Abbe were in no mood to talk about him.
Sorry, said his aunt, Raymonde Kerviel, before briskly slamming down the telephone receiver. I have no interest in talking about this.
In the French media, former colleagues and even agents in a neighborhood real estate office near his apartment remembered him for his understated sartorial elegance and a boyish resemblance to Tom Cruise.
Andre Tiran, the dean of the faculty at the University of Lyon, theorized that Mr. Kerviel's training in risk control management might have given him some critical advantages in any financial scheming.
It's a little bit like becoming a thief with training in locksmithing, Mr. Tiran said. If you're good at being a locksmith, then to steal is easier.
Bank officials said Mr. Kerviel did not profit personally from his scheme. But at a news conference Thursday, they called him a fragile being and said he had had family problems.
French financial experts, both here and in Davos, Switzerland, for the World Economic Forum, voiced skepticism that one unremarkable low-level trader could have carried out the most expensive fraud by a rogue trader ever.
Both the governor of the French central bank, Christian Noyer, and the French prime minister, Francois Fillon, insisted that the Kerviel case had nothing to do with the volatile stock markets around the world, or with the subprime mess. You can't throw everything together, said Mr. Noyer.
But Friday, Mr. Fillon seemed to criticize the central bank governor. While speaking to reporters in Luxembourg, Mr. Fillon said Mr. Noyer should have alerted him sooner to Societe Generale's huge trading loss. He only learned on Wednesday, though central bank authorities had known since the weekend. Mr. Fillon ordered the French finance minister to complete an investigation into the case in the next eight days.
Mr. Kerviel remained hidden from public view Friday. A handwritten note posted in his apartment building in the wealthy suburb of Neuilly-sur-Seine urged swarms of journalists to leave residents alone because the former trader had taken shelter elsewhere.
Kerviel, the note read. Is not known in the building.
Later in the day, plainclothes policemen arrived to search the apartment.
Mr. Kerviel's lawyer, Elisabeth Meyer, who said Thursday that Mr. Kerviel was available to meet with authorities, was not answering questions about her client Friday.
The only place Mr. Kerviel could be heard was on his answering machine. Some news organizations posted the softly spoken message on their Web sites.
Bonjour, the voice says. You've reached the mobile telephone of Jerome. I'm not available for the moment, so please leave a message, and I'll contact you as soon as possible.
[Illustration]PHOTOS: A plainclothes officer in the apartment of Jerome Kerviel. (PHOTOGRAPH BY THIBAULT CAMUS/THE ASSOCIATED PRESS); The front page of The Guardian on Friday, with a photo of Jerome Kerviel, blamed for a $7.2 billion loss at Societe Generale. (PHOTOGRAPH BY NICOLE BENGIVENO/THE NEW YORK TIMES)(pg. A6)