He doesn't live in a slum or wear tattered clothes. Jerome Kerviel looks like another man walking the streets of Paris. But behind the ordinary appearance lies a financial catastrophe so massive, it shook global markets and earned him the label of "the world's poorest man."
Once a promising trader at one of France's most prestigious banks, Kerviel became infamous for causing a $7.2 billion (Rs 4.95 lakh crore) loss to Societe Generale through unauthorised trades. It was one of the largest trading scandals ever recorded.
Who Is Jerome Kerviel?
Born in 1977 in Pont-l'Abbe, a small town in Brittany, France, Jerome Kerviel came from humble beginnings. His mother was a hairdresser, and his father, a blacksmith. He earned a Master's in Finance from Lumiere University Lyon 2.
In 2000, Kerviel joined Societe Generale, and by 2005, he was working in the Delta One division, a sophisticated trading unit dealing in equity derivatives and algorithmic trades. Despite being relatively junior, his deep understanding of IT systems and trading allowed him to navigate internal operations easily, and later, with dangerous freedom.
The Scandal
Between 2006 and 2008, Mr Kerviel began placing enormous trades far beyond his authorised limits. To hide them, he created fake offsetting transactions within the bank's systems. At one point, he had built up 50 billion Euros in market exposure, more than the market capitalisation of Societe Generale itself.
Initially, his trades yielded profits, earning praise from supervisors who allegedly turned a blind eye. But in January 2008, as the global financial crisis unfolded, his positions began to unravel. The bank launched an internal investigation, and on January 24, 2008, it announced losses of 4.9 billion Euros due to Mr Kerviel's unauthorised trading, nearly collapsing one of Europe's oldest financial institutions.
Jerome Kerviel's Arrest
Jerome Kerviel was arrested and charged with abuse of trust, forgery, and unauthorised use of computer systems. He claimed the bank was aware of his actions, or at least chose to ignore them while profits rolled in, a claim Societe Generale firmly denied.
In 2010, a French court sentenced him to five years in prison, with two years suspended, and ordered him to repay the entire 4.9 billion Euros. The judgment branded him the most indebted man on Earth.
After serving only five months, Mr Kerviel was released in 2014 under electronic surveillance. That same year, he undertook a 1,300-km walk from Rome to Paris, framed as a pilgrimage against the "tyranny of financial markets" and inspired by a meeting with the late Pope Francis.
Public opinion began to shift. In 2016, a labour court ruled his dismissal had been "without real and serious cause," awarding him 450,000 Euros in compensation. France's top court later overturned the 4.9 billion Euros repayment, acknowledging that Societe Generale's lax oversight had contributed to the scandal.
In 2022, damages were officially reduced to 1 million Euros.
Today, Jerome Kerviel lives a quieter life, reportedly working in IT consulting.
