Page last updated at 17:53 GMT, Friday, 4 July 2008 18:53 UK

SocGen hit by rogue trader fine

Jerome Kerviel
Jerome Kerviel says the bank was fully aware of his transactions

French bank Societe Generale has been fined 4m euros (3.2m; $6.3m) for allowing one of its staff to be in a position to operate as a rogue trader.

The French banking regulator pointed to "grave deficiencies" in SocGen's internal controls that allowed the losses which cost the firm 4.9bn euros. The losses have been blamed on 31-year-old trader Jerome Kerviel.

An independent report earlier accused the bank of being "negligent" in not identifying the problem.

In a statement released on Friday, the Banking Commission said that SocGen's staff monitoring did not focus enough on fraud issues. It added that there were "significant weaknesses" in the bank's IT security systems.

There had also been limits on how much Mr Kerviel had been able to trade, it said.

SocGen declined to comment on the findings.

Wrongdoing denied

However, a report compiled by three independent directors, released in May, found that Mr Kerviel's direct supervisor was inexperienced, with insufficient support to do his job properly.

It also said that "several" of Mr Kerviel's fraudulent transactions were processed by an unnamed assistant trader.

"The fraud was facilitated, or its detection delayed, by supervisory weaknesses over the trader and the market activities checking," the report said.

Mr Kerviel, who is on bail, faces charges including a breach of trust, fabricating documents and illegally accessing computers.

He has denied any wrongdoing - saying that the bank was fully aware of his transactions.

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