The world over, individuals with impressive wealth have continued to be admired by many while those with huge debts are left with clearing such debt or facing legal consequences. Hence, it can be implied that Jerome Kerviel is the poorest man in the world due to a shocking debt of €4.9 billion($6.7 billion). The French securities trader got into such a massive debt after making a huge loss of the company’s assets through unauthorized and false trades between 2006 and 2008.
Though, he may have made monies for the Societe Generale firm over the years and as well lost a huge part, here is what his story tells us about a fall from grace to grass.
Jerome Kerviel was Born and Raised in Pont-l’Abbé
He was born on January 11, 1977, in Pont-l’Abbé, a commune in the French department of Finistère. During his formative years, his mother Marie Josee worked as a hairdresser while his father was a blacksmith and from this, they were able to raise Jerome and his older brother, Olivier.
Regarding his educational qualification, there is no doubt about him being a highly educated man and we can infer this due to his academic record. He attended the University of Nantes where he graduated with a degree in Finance.
In 2000, he attained another new height when he graduated with a master’s degree in Finance from the prestigious Lumiere University Lyon 2. The school is notable for its focus on financial programs that will train people to work in middle and back office positions at trading departments of financial companies. Unsurprisingly, Jerome’s qualification fit in just right with this focus.
The 47-year-old Started Working as a Trader with France’s Second Largest Bank in 2000
Following the completion of his master’s program as mentioned earlier, he joined the middle office of France’s second-largest bank, Société Générale (SocGen) in 2000. Though he tried getting into politics by running for local council chair in 2001, it was not successful and this made him concentrate on his career in finance.
Moving forward, he proved to be an asset to SocGen which gained him a promotion to the position of a junior trader. To understand how good he was, the former governor of the Bank of France, Christian Noyer once described him as a computer genius. However, there are those who do not share this sentiment.
Also, he reportedly made so much money in profits trading for the bank that by 2006, Jerome was given a bonus of €60,000 aside from his salary of €74,000. In fact, he was expected to make a bonus of €600,000 which he would be eligible to take home half of that amount. Sadly, things took a turn for the worse and this marked his financial plunge.
How he Became the Poorest Man in the World
Jerome was assigned with trading for SocGen in what is referred to as rogue trading, however, he took matters to the extreme between late 2006 and early 2007 by engaging in fictitious trades. Reportedly, he started small and was able to cover his tracks but things went out of control when he increased the trading volume and frequency.
Throughout 2007, he anticipated a fall in market prices to enable him to cash out and thereby go beyond his authorized limit. While the anticipated market fall did not happen, he drew attention to himself by reaching €49.9 billion, a sum that was more than the total market capitalization of the bank.
He is said to have made a hidden profit of €1.4 billion and may have been working alone. In his defense, Kerviel claimed he was working to increase profits for the bank and they knew what he was doing. Regardless of his explanation, he was given the financial responsibility for the bank’s losses which were valued at €4.9 billion(valued at $6.7 billion at the time).
Aside from being financially poor, Kerviel also faced the devastating loss of his father and a divorce from his wife in 2008.
See Also: 10 Crazy Things People Have Done After Winning The Lottery
His Arrest and Sentencing
Kerviel is said to have fled Paris after the fraudulent transactions were discovered. However, his lawyers refuted these claims. On January 24, 2008, the bank filed a lawsuit against the then-31-year-old trader on the grounds of using forged documents and attacking an automated system. That same day, he was arrested and detained by the police to reduce his flight risk.
As part of an investigation into his activities, the police extended the detention time from 24 hours to 48 hours. This was to enable them to go through his systems, cell phones as well as investigate other accomplices.
He was formally charged on January 28 of the same year. However, he did not remain in detention. While a strong case had been built against him, it was not till June 8, 2010, that the trial began. After he was found guilty, Kerviel was sentenced to five years in prison with a condition of taking out two years if a restitution of €4.9 billion was made.
In 2014, a French high court upheld his prison sentence but maintained he would not pay the restitution amount. Notably, he served less than 5 months out of the sentence before he was provisionally released in the same year. You may be curious about this, it turns out that the case went through several appeals. Two years later, an appeal court condemned his former employer for unlawful firing. Also, the court cut down the damages to €1 billion.
What is Jerome Kerviel Up to?
It would be recalled that after SocGen fired Kerviel in 2008, he joined Lemaire Consultants &Associate, a computer consulting firm founded by Raymond Lemaire. Thus we would not be wrong to assume, he has changed his career path while starting afresh.
Moreso, after his release from prison in 2014, the Frenchman revealed he was looking forward to starting all over again. This he has shown in his decision to fight against his former employer in what he terms market tyranny. Notably, he took time to meet with Pope Francis in 2014 after which he took a pilgrimage from Rome to Paris as past of the protest. Of recent, not much has been heard about him, yet, we gathered that he is involved with a lot of workshops and seminars where he talks about leadership and finance.