Trader Jérôme Kerviel: Scapegoat or Victim of Greed and Stress?
Beginning traders almost always need their heroes. The millions in earnings, successful careers, and simply magnificent personal lives of successful managers become excellent role models for beginners.
However, the world of trading is filled not only with positive stories with a happy ending, but also with stories of downfalls, even imprisonment.
In this article, you'll meet yet another antihero who defrauded thousands of French investors, but at the same time proved to be nothing more than a scapegoat for an enraged public.
Early years
Jérôme Kerviel was born in the French town of Pont-l'Abbé on January 11, 1977. The Kerviel family was far from wealthy and almost always teetered on the edge of poverty, as Jérôme had an older brother and his parents were blue-collar workers.
My father also had a hard time making money, as his profession as a blacksmith required tremendous effort and health. His income was also limited by the fact that the town had only 8,000 residents, so both my mother and my father had very few clients.
Jérôme Kerviel himself grew up as a very ordinary boy. At school, he was an average student and showed no talent other than athleticism.
Incidentally, as a child, Jérôme was quite chubby, so many of his peers bullied him. However, instead of becoming an outcast, Jérôme joined judo and football, which eventually allowed him to become the undisputed leader of his class.
After graduating from high school, he enrolled in the Faculty of Finance at the University of Nantes, where he successfully earned a bachelor's degree. He then continued his studies in the Faculty of Organization and Control of Financial Markets at the Université Lumvière Lyon, where he completed his master's degree in 2001.
The teachers themselves described Jerome as a very ordinary student who studied diligently and did not waste his precious time on student pranks.
A Leap into Politics: A Trader's Career
Immediately after completing his master's degree, Jérôme Kerviel decided to apply his oratorical skills to politics.
He was encouraged to take this step by the then-mayor, Thierry Mavika. However, the election campaign was lost, with many noting that Jérôme was insincere and had very poor communication with his voters.
After a disastrous start to his political career, Jérôme received an offer from the major investment bank Societe Generale to head the standardization department, specifically working with certain trader reports and monitoring their transaction statistics.
After some time, Jérôme Kerviel was promoted to assistant trader, and just a couple of years later, he headed the division that dealt with arbitrage by purchasing futures on major economic indices on various platforms.
Jérôme's salary was around 100,000 rubles a year, but he also had to manage billions of dollars. In 2008, a huge secret was revealed, and bank representatives turned to the government for financial assistance.
As it turned out, Jerome opened positions worth approximately $50 billion, which, after the position was fixed, resulted in losses for the bank of $7 billion.
A law enforcement investigation was launched, and all leads were pinned on Jerome, who had falsified documents. The bank promptly fired the would-be trader and began an active campaign to sanitize its reputation.
Trader Jerome Kerviel was sentenced to three years in prison and two years probation, and was ordered to pay a $5 billion fine.
Many people ridiculed these compensation demands, but thanks to the lawyer's diligence, it was possible to prove that this fraud was carried out with the participation of the bank's top management, so the compensation demands were dropped.
By the way, after Jerome served his sentence, he managed to sue the bank for half a million dollars for illegal dismissal, and also wrote a book about how everything really happened.
