Kerviel lawyer probes SocGen unwinding of trades

By Sudip Kar-Gupta and Thierry Leveque

PARIS, July 30 (Reuters) - The new lawyer for Jerome Kerviel, blamed by French bank Societe Generale (SOGN.PA: Quote, Profile, Research) for the trading scandal that cost it billions of euros, said he was studying SocGen's unwinding of positions built up by his client.

"We want to know more about the unwinding of the position," Bernard Benaiem told reporters on Wednesday.

Benaiem said he was examining possible tax and insurance aspects to SocGen's unwinding of trades by Kerviel, who had built a position worth around 50 billion euros ($77.9 billion) that the bank then sold into an already sharply falling stock market.

On Jan. 24, SocGen unveiled 4.9 billion euros of losses which it said were caused by unauthorised deals carried out by Kerviel, a 31-year-old junior trader at the bank.

Kerviel was freed from prison in March after an appeal against his detention, but he remains under formal investigation for breach of trust, computer abuse and falsification.

SocGen has published several internal reports into the Kerviel affair. They show that Kerviel bypassed control systems to build up unauthorised trading positions for small amounts in 2005 and 2006, and then for bigger amounts in 2007.

In January, upon discovering Kerviel's position, which was greater than SocGen's own stock market value, the bank decided to unwind it swiftly between Jan. 21 and Jan. 23, when markets were already reeling from the global credit crunch.

This led to a loss of over 6 billion euros for the bank, which wiped out a previous 1.4 billion euro profit made by Kerviel's trades.