The Wall Street Journal-20080206-U-S- Prosecutors Seek Tie In Societe Generale Case

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U.S. Prosecutors Seek Tie In Societe Generale Case

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Federal prosecutors in Brooklyn, N.Y., are trying to find out whether there is any "U.S. element" to the Societe Generale SA trading scandal, according to a person close to the bank.

Prosecutors are trying to learn whether employee Jerome Kerviel, who has been blamed for the 4.9 billion euros ($7.27 billion) trading scandal, traded on a U.S. index or whether any transaction ran through a U.S. broker. The bank has said it is cooperating with authorities.

A spokesman for the U.S. attorney's office in Brooklyn declined to comment. A lawyer for Mr. Kerviel has said that his client acknowledges engaging in risky trades, but his employer was aware of his actions. The lawyer couldn't be reached yesterday.

Earlier this week it was reported that the Securities and Exchange Commission is investigating sales of stock by Societe Generale board member and American investor Robert A. Day and two foundations associated with him. It also was reported that federal prosecutors in Brooklyn were investigating, but what they were probing wasn't clear.

A spokesman for Mr. Day said the investor and the foundations sold shares in line with the timing permitted by Societe Generale's trading policies, all required government disclosures were made, and no inside information was used.

Societe Generale on Jan. 24 announced a 4.9 billion euros loss in the trading scandal.