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Last Updated: Monday, 28 January 2008, 22:29 GMT
French trader under investigation
Jerome Kerviel, pictured at a wedding in Paris
Acquaintances describe Mr Kerviel as shy and considerate
Preliminary charges have been filed against Jerome Kerviel, the trader blamed for huge losses at French bank Societe Generale.

He will be investigated for breach of trust, falsifying documents and breaching computer security - but not for fraud.

His lawyer, Elisabeth Meyer, called the judges' decision a "great victory" as Mr Kerviel was released on bail.

Societe Generale says his actions cost it 4.9bn euros ($7bn; 3.7bn).

Under French law, a formal investigation does not automatically guarantee that a trial will follow.

Societe General and Paris prosecutors had been pressing for a more serious charge of fraud against Mr Kerviel, but this accusation was thrown out by the judges tasked with investigating this case.

There has been no suggestion that Jerome Kerviel tried to take the money out of Societe General's coffers and put it into his own pocket
Clive Myrie, BBC's European Correspondent

Mr Kerviel's other lawyer, Christian Charriere-Bournazel, said his client had committed no fraud, adding that Societe General's chief executive Daniel Bouton had no evidence to back up his allegations.

"The word fraud was used by Mr Bouton numerous times," he said.

"Mr Bouton held this unfortunate man up for public vilification, threw him to the dogs... and there was no substance to it."

The BBC's European correspondent Clive Myrie says there was reason for the defence to feel very happy about the decision.

Fraud is a very difficult charge to prove and there has been no suggestion since the story broke that Jerome Kerviel had tried to take the money out of Societe General's coffers and put it into his own pocket, our correspondent says.

Breach of trust carries a maximum sentence of three years in prison and a fine of 370,000 euros ($546,637; 186,562).

'Great pretender'

Earlier, a Paris prosecutor said Mr Kerviel had concealed his trades to make him appear an "exceptional trader", but he did not mean to damage the bank.

"He did not do it directly for his personal gain. He acted as a trader, he certainly acted outside the authorisation he'd been given to trade on the market, but he didn't do it expressly to damage the bank through fraudulent operations," said Jean-Claude Marin.

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 says Mr Kerviel had a position, or a bet, worth about 50bn euros ($73bn; 37bn) on the future direction of European shares.

That was more than the bank's value - about 35bn euros - and about the size of France's entire annual budget deficit.

To avoid that potentially catastrophic loss the bank had to unwind Mr Kerviel's trades, but that still cost it 4.9bn euros.

Societe Generale said Mr Kerviel's background in handling the administration of trades enabled him to fool those monitoring traders' activities.

It says Mr Kerviel invented deals that, on paper, balanced out his bets.

Journalists wait outside the police premises where Mr Kerviel is being questioned
Journalists have yet to get a glimpse of Mr Kerviel

But the bank's internal controls are being questioned.

Mr Marin says the European derivatives exchange, Eurex, questioned Mr Kerviel's trading positions in November.

He also said Mr Kerviel told police that other traders had exceeded their trading limits.

The bank insisted it was the victim of a complex deception.

But the French President, Nicolas Sarkozy, said the bank's "highly paid" top managers would have to shoulder some of the responsibility for the trading scandal, believed to be the world's biggest to date.

"When there is an event of this nature, it cannot remain without consequences as far as responsibilities are concerned," he said.

Societe Generale's shares were down 3.8% at 70.59 euros on Monday after clawing back steeper losses earlier in the session.



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How the trader ended up being investigated



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