French bank says trader hacked computers

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"Our controls basically identified from time to time problems with this trader's portfolio," Mustier said.

But Kerviel explained away the red flags as trading mistakes, Mustier added.

"The trade was canceled, there was no specific follow-up to do," he said. "From our understanding today, the number of mistakes was not higher than (for) any other trader, so from our understanding that was not a reason to ring a bell."

Kerviel's lawyer said the trader made money for the bank through 2007 and has since been "thrown to the wolves of public opinion."

"He made profits for the bank until Dec. 31. From Jan. 1, he took risky positions like all traders," said Charriere-Bournazel, who is also president of the Paris bar association.

In a five-page statement Sunday, the bank said Kerviel used its money to build massive positions in futures contracts tied to the performance of baskets of stocks traded on exchanges in London, Paris, Frankfurt and other European markets.

Since those bets greatly exceeded the amount of capital he was allowed to put at risk, Kerviel entered fictitious and offsetting trades in Societe Generale's computer system that appeared to minimize the odds of big losses, the bank said. The trades were purposely chosen to avoid detection because they did not require cash contributions and were not subject to margin calls, which would require putting up more money if the fictitious bet soured, it said.

The bank said he plowed 30 billion euros ($44.1 billion) into the Eurostoxx index, another 18 billion euros ($26.5 billion) on the DAX in Germany and 2 billion euros ($2.9 billion) on the FTSE in London. The combined value of those positions, 50 billion euros ($73.5 billion), is far more than the bank's market capitalization of 35.9 billion euros ($52.6 billion), and close to the annual GDP of countries such as Slovakia, Qatar or Libya.

Societe Generale took three days last week to sell or offset with hedges his contracts, which amounted to bets on whether market indexes would rise or fall. But the bank sought Sunday to counter suggestions that its sell-off had caused already falling markets to plummet further than they otherwise might have done. The bank said it unwound Kerviel's positions in "a controlled fashion."

"Our impact on the market was quite minimal," Mustier said.

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