UPDATE 4-Rogue trader Kerviel says ex-bosses encouraged him

* Ex-bosses encouraged Jerome Kerviel’s trading

* Trial coincides with crucial SocGen investor day

* SocGen ex-chairman Bouton refuses to appear in person

* Twitter banned inside courtroom
(Adds lawyer comment, Kerviel quote)

By Lionel Laurent and Thierry Leveque

PARIS, June 8 (BestGrowthStock) – Jerome Kerviel said his bosses at
Societe Generale encouraged him to take risky market positions
as judges on the first day of his trial examined his role in a
4.9 billion euro trading loss that threatened to bring down the
French bank.

The 33-year-old ex-trader, dressed in an elegant, dark
suit, began his defence through his lawyer, saying his
superiors tolerated breaches in the bank’s risk control
systems.

“The encouragement of my superiors did not slow me down,”
Kerviel said, speaking in a barely audible voice, answering
questions from the presiding judge.

“At certain times it was extreme … Tiring, physically,”
Kerviel told the hot, cramped courtroom in Paris’s Palais de
Justice.

He said that he worked from 7 a.m. to 10 p.m., bank
holidays included, with only a brief break to eat a sandwich at
his desk.

Kerviel’s lawyer presented the man as a pawn in a wider
game while Societe Generale’s lawyer called for punishment for
his actions.

The trial comes as Societe Generale struggles to restore
investor confidence amid a fragile economic recovery and
looming regulation.

Kerviel quickly rose through the ranks of “middle-office”
and assistant roles before becoming a trader for the bank.

He has admitted to building unauthorised trading positions
that rocked world markets when Societe Generale revealed the
4.9 billion-euro ($6.6 billion) loss in January 2008.

During the largely procedural first day of the trial,
Kerviel’s lawyer said Societe Generale would have been clearly
able to see data showing Kerviel’s extraordinary profits of 1.4
billion euros at the end of 2007.

Lawyers also read a transcript of a conversation between
Kerviel and SocGen’s ex-investment bank chief Jean-Pierre
Mustier when the scandal broke, in which Mustier reportedly
said: “If you won 1.4 billion euros, that means you’re very
good. What you did was a pain, but it’s not a big deal.”

“PAWN FOR PROFIT”

Kerviel, who could face five years in jail and a
375,000-euro fine if found guilty of charges of breach of
trust, computer abuse and forgery, said he works as a
consultant and makes 2,300 euros a month.

Seated on a plastic chair in front of rows of lawyers in
black garb, the ex-trader said his annual salary at Societe
Generale was 48,000 euros in 2006 with an annual bonus of
60,000 euros.

The trial has drawn hundreds of journalists from around the
globe. The presiding judge has banned the use of microblogging
service Twitter inside the courtroom.

Kerviel is one of the most famous symbols of the financial
crisis and his trial is seen as important for matters of future
regulation and crisis prevention.

“The trial will be watched closely around the world because
it’s a symbol of financial excess and what’s going to be done
about it,” Bradley Simon, senior partner of law firm Simon &
Partners LLP, which specialises in white-collar defence, said
in a phone interview.

The trial also tests the ability of Societe Generale to
cast the blame on Kerviel or whether his actions will be seen
as “a cultural flaw in our capitalistic system,” Simon added.

Upon his arrival at court, Kerviel remained silent and
allowed his lawyer, Olivier Metzner, to address the media.

“We hope that there will be transparency, that the truth
will not be obstructed by Societe Generale, like it has been
for two years,” Metzner said.

Kerviel was used as a pawn for profit and then thrown away,
he said.

CHAIRMAN ABSENT

The bank’s former chairman, Daniel Bouton, who was forced
to step down last year in part due to the handling of the
Kerviel scandal, has refused to appear in person at the trial,
seeing his written testimony as sufficient, the presiding judge
said.

Although Kerviel has admitted to building unauthorised
trading positions leading up to the loss in 2008, he has said
breaches in Societe Generale’s risk control system were
tolerated, and this has been a key part of his legal defence.

Societe Generale has hit back by saying he acted alone and
that investigating magistrates had dismissed his claims of
tacit complicity from his bosses.

The bank said before the trial that it held Kerviel
entirely responsible and called for “exemplary punishment.”

Facing off in the trial are two of Paris’ best-known
lawyers — Metzner and Jean Veil.

Cigar-smoking barrister Metzner’s clients include ex-Panama
dictator Manuel Noriega, former Vivendi boss Jean-Marie Messier
and former French Prime Minister Dominique de Villepin.

The trial is due to run until June 25, clashing with
Societe Generale’s investor day on June 15.

Analysts have said the bank’s brand has suffered in the
wake of the Kerviel scandal, allowing rival BNP Paribas to gain
the advantage with domestic retail customers and, at the same
time, forcing SocGen to cut down on proprietary trading.
($1=.7453 Euro)

Investing Advice

(Additional reporting by Thierry Leveque and James Regan)
(Reporting by Lionel Laurent and Thierry Leveque. Editing by
Karen Foster, Will Waterman and Robert MacMillan)

UPDATE 4-Rogue trader Kerviel says ex-bosses encouraged him