Police search rogue trader's bank

The bank denies it mishandled the revelation of massive losses

French police say they have searched the Paris headquarters of Societe Generale, the bank at which a rogue trader is accused of massive fraud.

The search took place on Friday night, a bank spokesperson said, but gave no other details.

Police also scoured the flat of Jerome Kerviel - the man said to be behind the loss of 4.9bn euros ($7.1bn; £3.7bn) - taking away a number of briefcases.

His whereabouts remain unknown, though his family insists he is innocent.

"He is being made to carry the blame and is not the guilty one," one unnamed relative told the Reuters news agency.

'Absurd'

While Societe Generale has yet to officially name Mr Kerviel, it has filed a legal complaint against the trader, accusing him of defrauding the bank by making unauthorised financial trades.

It is difficult...to imagine how one person alone could, in a relatively short period of time, cause such considerable losses Francois Fillon, French Prime Minister Did rogue trader cause market meltdown?

Meanwhile, French prosecutors are conducting a preliminary investigation based on a complaint from the bank, and on two complaints from small shareholders in the bank, reported Associated Press.

The bank's chairman Daniel Bouton defended the bank's handling of the discovery of the losses in an interview with French newspaper Le Figaro on Saturday.

He insisted it would withstand the losses, and called allegations that the bank had triggered substantial falls on global stock exchanges last Monday as it tried to offload bad shares "absurd".

'Who was funding?'

As the recriminations continue, both Societe Generale shareholders, analysts and the French government have questioned how the rogue trader was able to operate alone.

Jerome Kerviel, the reported rogue trader

"It is difficult... to imagine how one person alone could, in a relatively short period of time, cause such considerable losses," said French Prime Minister Francois Fillon.

"They are saying all of this was cunningly concealed, but somebody must have been funding the collateral or whatever was needed to sustain those positions," said Derek Chambers at Standard & Poor's Equity Research.

The French government is also angry that Societe Generale did not inform it immediately after the losses were discovered.

French President Nicolas Sarkozy called the events at Societe Generale a "large-scale internal fraud", but added that the losses "do not affect the solidity and reliability of the French system".

'Personal gain?'

Societe Generale said the fraud was based on simple transactions, but concealed by "sophisticated and varied techniques".

SOCIETE GENERALE IN FIGURES Founded in 1864 467bn euros in assets under management (as of June 2007) 22.5m customers worldwide 120,000 employees in 77 countries Societe Generale share price

Mr Kerviel was responsible for betting on the markets' future performance, bank executives said.

Societe Generale said the trader had taken what it called "massive fraudulent directional positions in 2007 and 2008 beyond his limited authority".

Executives said the trader may not have sought personal gain from the fraudulent deals.