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Last Updated: Tuesday, 5 February 2008, 15:49 GMT
Kerviel refuses to be 'scapegoat'
Jerome Kerviel
Jerome Kerviel has police protection while under investigation
The man at the centre of the rogue trader investigation has said he will not be made a "scapegoat".

In an interview with AFP, Jerome Kerviel said: "I accept my share of responsibility but I will not be made a scapegoat for Societe Generale."

His comments came as the Bank of France governor Christian Noyer backed the French Finance Ministry's criticism of the bank's risk controls.

Mr Kerviel has been blamed for costing the bank 4.9bn-euro ($7bn; 3.7bn).

Mr Kerviel is accused of breach of trust, falsifying documents and breaching computer security.

He said that he never considered "running away" after the bank blamed him for huge trading losses.

Police protection

He was questioned for eight hours on Monday by judges investigating his actions.

They are establishing the strength of the case against him before filing any formal charges.

While not being held in custody, Mr Kerviel is under 24-hour police protection.

Societe Generale accuse him of taking an unauthorised position, or a bet, worth about 50bn euros on the future direction of European shares.

To avoid that potentially catastrophic loss, the bank was forced to close Mr Kerviel's positions, a move that cost the bank 4.9bn euros.

France's top central banker said that he had let the bank sell these positions in secret in an effort to avoid a repeat of the panic caused in the UK last September when Northern Rock approached the Bank of England for emergency funds.

"My first concern, remembering the very painful experience of the United Kingdom over a very different case just a few months ago, was to ensure the problem was tackled and solutions put in place so that there were no announcements without solutions," he said.

No explanation

Mr Noyer said it seemed "improbable" and "incomprehensible" that the illicit trades had not been detected sooner.

He considered the scandal could only "result from a succession of what I hope are small errors, of small inaccuracies, of alerts that never went far enough".

"Frankly, I can't explain it and it is what I am waiting for most patiently from our investigation," he added.

He also backed proposals from Christine Lagarde, France's economy minister, for tougher penalties to be imposed on banks that failed to carry out proper risk controls in testimony to the French National Assembly's finance committee.

But insisted that the problems were contained to Societe Generale and not symptomatic of a wider malaise in the French banking industry.

US investigations

Societe Generale is now facing investigations by US authorities.

The US Attorney's Office for the Eastern District of New York has contacted the French bank.

SocGen said it was cooperating with the inquiry but would not give any details.

Separately, the Wall Street Journal reported that market regulators were looking at share sales made by a board member days before the scandal broke.

Share sales

According to the newspaper report, the Securities and Exchange Commission (SEC) is investigating share sales made by board member Robert Day and two foundations associated with him.

The report said that Mr Day and his family's trusts and foundations sold $140m worth of shares two weeks before the bank notified its board about the loss blamed on rogue trader Jerome Kerviel.

The bank has said inside information did not influence these trades.

"Mr Day, like other board members, was not advised of Mr Kerviel's trading losses," the bank said.

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