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Societe Generale trader ordered held

February 09, 2008|From the Associated Press

PARIS — A French securities trader was ordered into custody Friday while investigations continued into the billions of dollars in losses he allegedly caused at Societe Generale bank.

A probe into the case broadened as well, with police taking into custody a brokerage employee who reportedly had been in contact with Jerome Kerviel, the 31-year-old trader.

Prosecutors sought to jail Kerviel to keep him from contacting accomplices, if he had any, and jeopardizing what promises to be a long and complex investigation.

Judges allowed Kerviel to go free last month, after his lawyer argued that he posed no flight risk. Kerviel plans to appeal his return to custody, said lawyer Raphael Colas, who works with Kerviel's attorney, Elisabeth Meyer.

News that police had arrested a second person, an employee at a brokerage arm of Societe Generale, again raised questions about whether Kerviel acted alone.

Societe Generale, one of France's biggest banks, has said Kerviel did not appear to have accomplices when he made massive unauthorized bets on European futures markets that the bank said cost it more than $7 billion to unwind.

A judiciary official said the bank had turned over new evidence, including a message sent to Kerviel through the bank's computer system by the broker now in custody.

The message, sent Nov. 30, read: "You have done nothing illegal in terms of the law," the official said, confirming a report that first appeared in the Le Monde newspaper.

The employee from brokerage Newedge, a joint venture between Societe Generale and bank Calyon, was taken into custody Thursday and Newedge's office was searched, according to the judiciary official.

Le Monde said Kerviel passed trades through the brokerage, and police suspect the brokerage employee was aware of Kerviel's activities.

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