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Insult to Injury Department: Jerome Kerviel Division
Société Générale says that Jerome Kerviel lost more than $7.8 billion of its money on lousy trades hidden by phony hedges. For this, it has said it plans to fire the trader.
Under French law, however, Kerviel still has the right to sue the bank for wrongful termination.
How can that be? In France, employers must meet with workers when firing them. But after Société Générale announced the huge hole in its books, prosecutors carted Kerviel off to jail while they tried to decide whether he had committed a crime.
Compounding that isolation, French magistrates forbade Kerviel and the bank to talk to one another while the investigation was under way.
Unable to meet him face-to-face, as the law requires, Société Générale sent Kerviel a letter in prison in January informing him that it would stop paying him immediately and planned to formally terminate his employment.
Since then, Kerviel's lawyers have reminded the bank that their move is in violation of French labor laws.
"No lawsuit has been filed as of today," one of the lawyers, Christophe Reille, told Bloomberg News. "We can't say that we'll never file a suit."
by Mark Stein
