Soc.Gen: Lying trader created $7B losses alone

PARIS, France (CNN) -- An interim report issued Wednesday by independent board members of the French bank Societe Generale has concluded that a trader working alone was responsible for amassing trading losses that exceeded $7.2 billion.

"The author of the fraud started taking his non-authorized, directional positions in 2005 and 2006 for small amounts, but in an important manner beginning in March of 2007," the report said, adding that the bank did not become aware of events until late last month.

"Controls over trading functioned as normal, but the identification of the fraud took so long and the fraud went on for so long because of the efficiency and variety of techniques of lying used" by the man who carried it out, the report said.

Though the 27-page report did not identify the trader by name, the bank has identified him as Jerome Kerviel, 31.

Last week, Kerviel's lawyer said the bank must have known about and condoned his deals.

Wednesday's report -- called the Staged Report of the Special Committee of the Board of Directors of Societe Generale -- said it did not reach conclusions about anyone else in middle management who may have been aware of what was going on in light of the fact that a judicial investigation is under way.

Kerviel has been charged with abuse of confidence and illegal use of computers for his role in the losses but has not been charged with fraud. He faces up to three years in prison.

Societe Generale has portrayed Kerviel as a computer whiz who was able to evade detection because of his back-room knowledge of the bank's regulatory controls.

His lawyer disputes that, saying the bank is simply using his client as a scapegoat.

In addition to a criminal investigation, there are ongoing investigations by the French banking regulatory commission and French senate finance committee. Societe Generale stockholders also have filed suit against the bank. E-mail to a friend