Jerome Kerviel: Was His Sentence Fair?
This paper examines the Jerome Kerviel trading fraud case, in which a Société Générale trader was sentenced to three years in prison and ordered to repay €4.9 billion after causing losses of roughly the same amount. The paper argues that the sentence was both unfair and disproportionate, contending that the bank itself bore significant responsibility: its risk managers repeatedly received alerts about irregular trading, Kerviel's superiors collected bonuses from his trades, and the trader personally profited nothing from his positions. Drawing on news accounts and a textbook on information technology ethics, the paper makes the case that Kerviel functioned as a scapegoat for broader institutional failures within a profit-driven banking culture.
- Introduction: The Kerviel Case: Overview of the fraud, sentence, and central question
- Nature of the Offence: How Kerviel concealed trades using fictitious transactions
- Why the Sentence Was Unjust: Argument that punishment was disproportionate and misdirected
- The Bank's Complicity and Failure of Safeguards: Société Générale ignored repeated warnings about Kerviel
- Personal Gain and Systemic Wrongdoing: Kerviel kept nothing; managers collected bonuses from his trades
- Conclusion: Kerviel portrayed as scapegoat for systemic banking failures
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What makes this paper effective
- The paper takes a clear, consistent argumentative stance from the outset and defends it throughout without wavering, giving it a strong persuasive structure.
- It uses multiple independent lines of reasoning — the bank's ignored alerts, the absence of personal gain, and the bonuses paid to managers — to build a cumulative case rather than relying on a single point.
- Source integration is handled competently: quotations are attributed, paraphrased claims are cited, and the works cited list is formatted consistently.
Key academic technique demonstrated
The paper demonstrates evaluative argumentation: rather than simply summarizing the facts of a case, it applies ethical reasoning to assess whether a real-world legal outcome was just. It uses counterfactual questions ("How could a junior trader bypass safeguards without the knowledge of senior managers?") to expose logical gaps in the prosecution's narrative, a useful technique for persuasive academic writing.
Structure breakdown
The paper opens by establishing the facts of the case and the central question. It then defines the specific offence before presenting a multi-part argument that the sentence was disproportionate. Each paragraph introduces a distinct piece of supporting evidence — institutional complicity, failure of internal controls, absence of personal benefit, and parallel misconduct by other traders — before a brief concluding verdict. The structure is linear and easy to follow.
Introduction: The Kerviel Case
In what has come to be regarded as one of the largest white-collar trading frauds in recent times, a trader by the name of Jerome Kerviel ended up costing his employer a total loss of €4.9 billion. For this, Kerviel — who was until then an employee of Société Générale — was, according to Reuters, sentenced to three years in prison. He was also ordered to repay his former employer a total of $6.8 billion, a figure representative of the loss he caused (Reuters). This decision was upheld in October 2012 by a Paris appeals court. The central question this paper seeks to address is: can Kerviel's sentence be regarded as just?
Nature of the Offence
Before analyzing the sentence, it is prudent to first consider the specifics of the offence with which Kerviel was charged. In the words of Clark, "Mr. Kerviel's fraud, according to the bank, consisted of placing sizeable, real purchases in one portfolio but creating fictitious sales transactions in the second, offsetting portfolio." From the outset, it seems unlikely that a lone trader would engage in irregularities of this kind without being detected. According to Société Générale, its risk managers had on several occasions questioned Kerviel's activities (Clark). However, as Clark further notes, the bank explains that no investigations were instituted because Kerviel's "explanations diffused any suspicions."
Why the Sentence Was Unjust
Kerviel's sentence is not only unfair but also disproportionate. The sentence is a clear indicator that, in the eyes of the law, Société Générale played no role whatsoever in a lapse that came close to bringing it down. However, taking all the specifics of the case into consideration, the sentence reflects a serious miscarriage of justice. To begin with, it could not have been reasonably possible for Kerviel to gamble away a fortune without the bank's knowledge and/or authorization. The bank's systems were either faulty, or its managers were aware of Kerviel's dealings. Either way, Société Générale was complicit in what occurred. Allowing a single individual to shoulder the entire blame is therefore unjustified. The blame, in this case, was wrongly apportioned.
Conclusion
In the final analysis, Kerviel should be seen as the fall guy for a rogue banking system largely concerned with profit maximization. Given the specifics of the case — the bank's ignored alerts, the absence of personal gain on Kerviel's part, the bonuses collected by his superiors, and the apparent prevalence of similar conduct among other traders — acquittal should have been the only just outcome.
Works Cited
Chrisafis, Angelique. "French Rogue Trader Loses Appeal Against Conviction and €4.9bn Fine." The Guardian. N.p., 24 October 2012. Web. 6 December 2012.
Clark, Nicola. "Bank Outlines How Trader Hid His Activities." The New York Times. N.p., 28 January 2008. Web. 5 December 2012.
Lichfield, John. "French Rogue Trader Jerome Kerviel Jailed for Three Years and Ordered to Repay €4.9 Billion (Which He'll Earn in 300,000 Years)." The Independent. N.p., 24 October 2012. Web. 6 December 2012.
Reuters. "Kerviel's Fine the Size of 20 Airbus A380s." Reuters. N.p., 5 October 2010. Web. 5 December 2012.
Reynolds, George. Ethics in Information Technology. 3rd ed. Boston, MA: Cengage Learning, 2009. Print.
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