2nd employee is held in Société Générale trading scandal

The French authorities on Wednesday took a second employee of Société Générale into custody in connection with the trading scandal that the bank said cost it nearly €5 billion. The Paris financial police searched the bank's trading room in the La Défense business district outside Paris on Wednesday morning, Isabelle Montagne, a spokeswoman for the prosecutor's office, said. A male broker from the cash equity trading department was taken in for questioning for up to 48 hours, she said. Melody Jeannin, a Société Générale spokeswoman, confirmed that the police had taken the employee away for questioning as part of its investigation. She declined to comment further. Neither prosecutors nor the bank spokeswoman would identify the broker. But other bank employees identified him as Manuel Zabraniecki, 29, who joined Société Générale's equity sales team in October 2006. Zabraniecki was one of 11 people originally listed as friends of the accused former trader, Jérôme Kerviel, on his personal profile on the Facebook social networking site. Kerviel's profile was deactivated in late January, shortly after the Société Générale scandal broke. The new detention came two days before a hearing at the Paris appeals court, where lawyers for Kerviel, 31, planned to seek his release from jail. Kerviel was placed in pretrial detention on Feb. 8 after prosecutors persuaded judges of the need to block him from fleeing or tampering with evidence and witnesses. Last month, authorities questioned Moussa Bakir, a 32-year-old broker at Newedge, a former Société Générale affiliate previously known as Fimat. Bakir was held for two days by the police and then released without charge, although he remained described as a person of interest in the case. Société Générale disclosed its losses, equal to more than $7 billion, in January, after unwinding €50 billion worth of unauthorized bets that Kerviel had hidden through a series of fictitious transactions. The revelation raised questions about the quality of risk management and oversight at the bank. Lawyers for Kerviel maintain his supervisors were aware of his actions, but none have been singled out so far in the bank's internal investigation. The huge loss has also led to speculation about a takeover bid of Société Générale, a 144-year-old lender based in Paris.

Source: http://www.iht.com/articles/2008/03/12/business/socgen.php