PARIS (AFP) -- French trader Jerome Kerviel, who allegedly cost banking giant Societe Generale 4.9 billion euros (7.15 billion dollars) in losses, was taken into police custody in Paris on Saturday, a judicial source said.

Kerviel, 31, was being held for questioning after arriving in a police van at the headquarters of the Paris police’s financial brigade around 2:00 pm (1300 GMT), said the source.
He had dropped out of sight before the bank announced its colossal losses on Thursday, which slashed the bank’s 2007 profit to 600-800 million euros from 5.2 billion in 2006.
An unmarked car and the van had left the financial brigade building an hour earlier, returning to its underground car park with Kerviel while a strong force of police kept back journalists.
The detention came after police raided Kerviel’s apartment on Friday in the wealthy Paris suburb of Neuilly sur Seine, taking away documents, and also took possession of computer files at the bank’s Paris headquarters.
One of France’s three biggest banks, Societe Generale on Thursday took legal action against Kerviel, accusing him of falsifying documents and making use of falsified documents as well as unauthorised computer access.
The Paris prosecutor’s office opened a preliminary investigation into the scandal while scores of shareholders lodged suit against the bank for fraud and misconduct.
The French government has demanded a full accounting over the bank losses, the biggest of their kind in financial history.
The Kerviel case dwarfs that of Nick Leeson, the “rogue trader” who lost 1.5 billion dollars at Barings, causing the failure of the venerable British bank in 1995.
Lawyer Elizabeth Meyer, who represents Kerviel, earlier said her client was not “on the run” and that he was ready to cooperate with justice officials.
Kerviel worked in the investment bank division, moving from the middle office, which checked deals, to the front office or trading desk in 2005. Bank sources said his earlier job gave him knowledge of how to get round checks on trades.
In an interview published Saturday in the daily Le Figaro, Societe Generale chairman Daniel Bouton denied that the bank’s management had made any strategic errors which led to the scandal.
“What happened at Societe Generale is certainly not a disaster that resulted from our strategy. It is more like an accidental fire which destroys a large factory at an industrial plant,” Bouton said.
He also rejected any suggestion that the bank had sought to hide the losses.
The head of the European Central Bank, Jean-Claude Trichet, called for tighter self-regulation by banks after the scandal.
A presidential advisor revealed that Kerviel had held positions of more than 50 billion euros -- more than the bank’s current market capitalisation of 35.9 billion euros.
“Questions will have to be asked about the internal controls of the banking systems,” Raymond Soubie told French television, saying it was “amazing” the trader had not been caught.
Prime Minister Francois Fillon demanded a finance ministry report within a week on the bank losses.
Spiegel-Online, the website of German weekly Der Spiegel, said Kerviel negotiated 140,000 contracts “a few weeks ago” on the Eurex derivatives market, a Swiss affiliate of the German bourse.
With the DAX falling more than 600 points between the beginning of the year and January 18, Kievel would have probably lost some two billion euros (2.8 billion dollars), Spiegel-Online said, quoting experts.
It added that Societe Generale had been alerted to the enormous losses by German sources.
The scandal is a fresh blow to investor confidence as global banks reel from multi-billion dollar writedowns over the subprime crisis.
Bouton rejected as “absurd” U.S. media suggestions that the trader may have helped push the U.S. Federal Reserve into an unprecedented rate cut on Tuesday, deceived by Societe Generale’s high-volume sales of tainted positions at the start of the week.
Described by work colleagues as a shy, hesitant character, Kerviel’s resume depicts him as a judo and sailing fan who once ran for municipal office in his hometown of Pont l’Abbe in Brittany, western France.
His aunt, who lives in Pont-l’Abbe, told AFP that her nephew “must have been manipulated.”
“They are an honest family, who have nothing to reproach themselves for. The young man has always been serious, reserved,” Sylviane Le Goff said.
“In my opinion, it is his bosses and employers who should be looked into,” she said, adding that her sister had gone to Paris on Thursday to try and “comfort” her son.
Many experts said it was difficult to believe a lone trader could have successfully hid such colossal losses.
Societe Generale announced at the same time as the fraud that it had lost about two billion dollars on its subprime exposure.
But the Bank of France governor said he was certain Societe Generale had not sought to disguise losses made in the subprime mortgage crisis.