(Xinhua)
Updated: 2008-01-29 11:17

PARIS -- French judges freed Jerome Kerviel from police custody on Monday after clearing fraud charges on the rogue trader who nearly bankrupted the country's second largest bank Societe Generale.

A man, whom French media are identifying as Societe Generale employee Jerome Kerviel, is seen in this undated photo. The trader at the heart of an alleged 4.9 billion euros ($7.1 billion) fraud at French bank Societe Generale has been identified as Kerviel, three sources within the company said on Jan. 24, 2008 . [Agencies]

Kerviel was freed on bail after being placed under formal investigation for "breach of trust," "falsifying and using falsified documents," and "breaching IT procedures," said his lawyer Elisabeth Meyer.

Judges rejected a bid to charge Kerviel with the more serious crimes of "gross breach of trust" and "attempted fraud."

The 31-year-old trader has been blamed for causing 4.9 billion euros (US$7.15 billion) in losses for the bank through his rogue transactions.

The judges also told him not to communicate with Societe Generale employees or to work in any financial services capacity until the case was resolved.

Kerviel had admitted during two days of questioning that "he carried out a certain number of acts to conceal reckless positions on the markets," said prosecutor Jean-Claude Marin.

However, the prosecutor said Kerviel did not try to profit personally from the deals. "He wanted to be seen as an exceptional trader, an astute market player," said Marin.

Societe Generale has said Kerviel betted 30 billion euros (US$44.12 billion) on the Eurostoxx index, 18 billion euros (US$26.47 billion) on the DAX in Germany and 2 billion euros (US$2.94 billion) on the FTSE in London.

Total value of those positions, or some US$73.5 billion, has far exceeded the bank's market capitalization of around US$52.6 billion.

The bank's share prices have shrank some 22 percent since the close on Jan. 9. and it now needs to raise 5.5 billion euros (US$7.7 billion) in emergency capital to shore up its ravaged balance sheet.

President Nicolas Sarkozy had earlier warned of consequences for those responsible for the scandal.

"When there is an event of this nature, it cannot remain without consequences in terms of responsibility," he said.