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Another SocGen Trader Taken Into Custody
By PIERRE-ANTOINE SOUCHARD (Associated Press Writer)

March 13, 2008 (Associated Press) PARIS - Another trader at Societe Generale was taken in for questioning Wednesday after investigators searched the French bank's offices in connection with a multibillion dollar trading scandal, judicial officials and the bank said.



Investigators are trying to determine whether Jerome Kerviel - the trader blamed by SocGen for unauthorized trades that cost it nearly $7 billion - had accomplices, judicial officials said. They spoke on condition of anonymity because the investigation is ongoing.

Societe Generale spokeswoman Laura Schalk confirmed that investigators searched its offices on Wednesday, taking some records and detaining the employee, whose name she declined to provide. She called the search part of "normal proceedings" in the probe.

Christophe Reille, a spokesman for Kerviel, declined to comment.

A French court is scheduled to rule Friday on whether Kerviel should be freed from a Paris prison during the investigation. Investigators have said they want to prevent him from speaking with any possible accomplices.

Kerviel says he acted alone, but that his bosses must have been aware of his massive risk-taking, and turned a blind eye as long as he was making money for the bank. Investigators are searching for others who could have known about, or participated in, what the bank says was Kerviel's unauthorized activity.

A preliminary internal probe by Societe Generale found no evidence that anyone helped Kerviel hide his positions. The report did say bank officials failed to follow up on 74 warnings about questionable trades, uncovering Kerviel's positions only on the 75th.

Kerviel's lawyer Guillaume Selnet told The Associated Press last week he will be asking why the alerts "didn't provoke any reaction."

Societe Generale says Kerviel forged documents and e-mails to suggest he had hedged his positions.

The bank reported a trading loss of nearly 4.9 billion euros ($7.58 billion) on Jan. 24 from liquidating 50 billion euros ($73 billion) in unauthorized futures positions Kerviel had taken.

He was taken into custody following the bank's disclosure of its massive losses, and faces preliminary charges of forgery, breach of trust and unauthorized computer activity. Such charges mean judges have decided that further investigation is needed. If tried and convicted, he faces up to three years in prison and hefty fines.

Last month, investigating magistrates questioned an employee of Newedge, a joint venture between Societe Generale and Calyon bank through which Kerviel passed some of his trades. Moussa Bakir was released without charge after two days of questioning about the case.

On Tuesday, Societe Generale successfully raised 5.5 billion euros ($8.4 billion) in new capital through a share offering designed to restore its status. Many analysts have said the success of the capital increase was essential for the bank's continuing independence.

SocGen shares rose around 6 percent Wednesday following an unsourced report in La Tribune business daily that rival BNP Paribas, which has said it is mulling a bid, could give details before the annual SocGen shareholder meeting May 27. BNP Paribas called the report part of the "rumor mill."

-- Associated Press writers Emma Vandore and Jenny Barchfield contributed to this report.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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