Paris trader loses $751 million in derivative deals

PARIS — A Paris judge on Thursday filed preliminary charges against a trader suspected of losing more than 600 million euros ($751.5 million) in complex derivative trades at French mutual bank Caisse d'Epargne, a judicial official said.

The trader, Boris Picano-Nacci, was placed under judicial supervision by investigating magistrate Xaviere Simeoni after spending 36 hours being questioned by financial police, the official said.

The move gives the judge time to investigate before ordering a trial or dropping "breach of trust" charges. The official was speaking on condition of anonymity, in accordance with judicial policy.

Picano-Nacci and his lawyer left the court by a side entrance, avoiding reporters. The terms of the judicial supervision order ban the trader from leaving France or having any contact with employees of Caisse d'Epargne.

The bank's top three executives quit after the losses became known on Oct. 17.

Jean Reinhart, the lawyer for Caisse d'Epargne, said in a statement that Caisse Nationale des Caisses d'Epargne — the holding company of the Caisse d'Epargne group — had acknowledged the charge against its former trader and confirmed its intention of becoming a civil party in the case "shortly."

A Caisse d'Epargne spokesman has said the bank now calculates the loss was larger than the 600 million euros ($751.5 million) it initially announced.

The spokesman declined to provide a new estimate, although the prosecutor's office has mentioned the loss would amount to 751 million euros ($940 million).

Paris prosecutors are investigating whether there are grounds for a possible legal case of breach of trust.

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