SG's Kerviel report blames supervisors and accomplice

Inattention by inexperienced supervisors and an accomplice in the bank's middle office helped Jerome Kerviel carry out rogue trades that lost Société Générale €4.9 billion in January this year, according to reports released by the bank today.

SG said that its internal investigation had discovered "indications of internal collusion" - a middle-office employee had apparently helped Kerviel conceal his unauthorised trades by entering fictitious offsetting trades and keeping track of the profits he had made. However, there were no signs of collusion with Kerviel's broker at the bank's Fimat subsidiary, contrary to earlier reports.

The resignation of Kerviel's manager in January 2007 left him unsupervised for almost three months - and his replacement was inexperienced and unable to exert proper oversight, the report added.

Another report, also released today by the bank's auditors, PricewaterhouseCoopers, listed improvements to internal controls, including better reporting systems, reorganised oversight and biometric controls on trading systems.

The criminal investigation of Kerviel's activities is still underway.

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