New suspect in custody in French bank fraud scandal

Business Materials 8 February 2008 15:37 (UTC +04:00)

( dpa ) - French police on Friday took into custody a possible accomplice of the trader whose unauthorized transactions cost one of the country's largest banks, Societe Generale, losses of more than 4.8 billion euros (7.1 billion dollars), the web site of the daily Le Monde reported.

The man being questioned by financial fraud investigators worked for a Societe Generale subsidiary, Firmat, specializing in the trade of derivatives, and allegedly was aware of the positions the trader, Jerome Kerviel, built up in his transactions.

The development came just hours before a Paris appeals court was to rule on a request by the public prosecutor's office to put the 31- year-old Kerviel behind bars again.

Financial experts doubted the bank's assertion that one junior trader, no matter how clever, was able to circumvent the bank's controls for more than a year without help.