SocGen Questioned on Deals by Rogue Trader in November

PARIS -- Exchange officials questioned deals by Societe Generale trader Jerome Kerviel in November 2007, the Paris prosecutor said Monday, adding to pressure on the French bank to explain how the trader almost brought it down.

The prosecutor, whose job is to decide whether there is a case to answer in what would be the worst trading fraud in bank history, said Kerviel confessed to police that he hid his activities from superiors, but said other traders also broke bank rules.

"Eurex alerted Societe Generale in November 2007 about the positions taken by Jerome Kerviel. Questioned by the bank, he produced a fake document to justify the risk cover," prosecutor Jean-Claude Marin said.

Kerviel told police that he concealed his trades because he wanted to enhance his reputation as a trader, not out of any desire to hurt the bank, Marin told a news conference

SocGen said it suffered a 4.9 billion euro ($7.2 billion) loss as a result of his unauthorized trades which were revealed last week.

SocGen has said it was completely in the dark about Kerviel's alleged illicit trades until he was confronted by his supervisors 10 days ago.

The prosecutor said he had requested that Kerviel, 31,who turned himself in for questioning on Saturday, be held in temporary detention.

SocGen's shares tumbled on Monday after Citigroup said the French bank's franchise was "severely impaired."

French Economy Minister Christine Lagarde said Monday that Societe Generale was under no pressure to merge with another bank as its shares plunged.

"Societe Generale is under no constraint to merge with another financial company," Lagarde told France 2 television.

Lagarde's statement was the latest sign that France's establishment is rallying round to SocGen's defiance in an attempt to stave off talk that a foreign rival might launch a takeover bid for the company as its market value sinks.