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Trader taken in for questioning in probe

Jerome Kerviel, a 31-year-old trader, blamed by French bank Societe Generale for a massive fraud is taken into custody on Saturday.

world Updated: Jan 26, 2008 22:47 IST

A trader blamed by French bank Societe Generale for a massive fraud was taken into custody on Saturday, judicial officials said.

Financial police in Paris were questioning Jerome Kerviel as part of a probe into Societe Generale's announcement on Thursday that the 31-year-old trader was behind a fraud costing the bank euro 4.9 billion (US$7.14 billion), judicial officials said. They were speaking on condition of anonymity because the investigation is continuing.

It was the first time since Thursday's announcement that Kerviel's whereabouts were publicly known, despite an extensive media hunt. Journalists from around the world have staked out Kerviel's apartment, as well as relatives' homes, for days but they failed to catch a glimpse of him, prompting speculations that he was on the run.

Kerviel's lawyer had insisted, however, that he had not fled the country and was available for police questioning.

Judicial officials also confirmed police conducted a search of Kerviel's apartment in the Paris suburb of Neuilly-sur-Seine. They said police also went Friday night to the bank's headquarters, where they were provided with documents relating to the investigation, officials said.

Paris prosecutors are conducting a preliminary investigation based on three complaints: one by the bank accusing Kerviel of fraud, and two by small shareholders.

Societe Generale said it discovered the fraud last weekend and unwound the trader's losing bets starting Monday, when world markets tumbled.

Some analysts have questioned whether Societe Generale exacerbated the fall and indirectly led to the US Federal Reserve's subsequent decision to cut rates.