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Another SocGen trader faces questioning

PARIS (AP) - Another trader at Societe Generale (SocGen) was taken in for questioning yesterday after investigators searched the French bank's offices in connection with a multi-billion dollar trading scandal, judicial officials and the bank said.

Investigators are trying to determine whether Jerome Kerviel - the trader blamed by SocGen for unauthorised trades that cost it nearly $7 billion - had accomplices, judicial officials said. They spoke on condition of anonymity because the investigation is ongoing.

SocGen spokeswoman Laura Schalk confirmed that investigators searched its offices yesterday, taking some records and detaining the employee, whose name she declined to provide. She called the search part of "normal proceedings" in the probe.

Christophe Reille, a spokesman for Mr. Kerviel, declined to comment.

A French court is scheduled to rule tomorrow on whether Mr. Kerviel should be freed from a Paris prison during the investigation. Investigators have said they want to prevent him from speaking with any possible accomplices.

Mr. Kerviel says he acted alone, but that his bosses must have been aware of his massive risk-taking, and turned a blind eye as long as he was making money for the bank. Investigators are searching for others who could have known about, or participated in, what the bank says was Mr. Kerviel's unauthorised activity.

A preliminary internal probe by SocGen found no evidence that anyone helped Mr. Kerviel hide his positions. The report did say bank officials failed to follow up on 74 warnings about questionable trades, uncovering Kerviel's positions only on the 75th.

Mr. Kerviel's lawyer Guillaume Selnet told The Associated Press last week he will be asking why the alerts "didn't provoke any reaction."

SocGen says Mr. Kerviel forged documents and e-mails to suggest he had hedged his positions.

The bank reported a trading loss of nearly 4.9 billion euros ($7.58 billion) on January 24 from liquidating 50 billion euros ($73 billion) in unauthorised futures positions Mr. Kerviel had taken.

He was taken into custody following the bank's disclosure of its massive losses, and faces preliminary charges of forgery, breach of trust and unauthorised computer activity. Such charges mean judges have decided that further investigation is needed. If tried and convicted, he faces up to three years in prison and hefty fines.

Last month, investigating magistrates questioned an employee of Newedge, a joint venture between SocGen and Calyon bank through which Mr. Kerviel passed some of his trades. Moussa Bakir was released without charge after two days of questioning about the case.