Investors ask how long SocGen heads can last

By Andrew Hurst and Tim Hepher - Analysis

PARIS (Reuters) - Doubts are growing whether top managers at Societe Generale can survive the huge blow to their credibility from the bank's $7 billion fraud scandal and keep its successful investment banking unit growing.

SocGen maintains Jerome Kerviel, 31, who handed himself over to the authorities on Saturday, three days after the venerable bank unveiled the biggest investment banking fraud in history, was a low-ranking dealer who acted all on his own.

But with the government openly expressing frustration at not being warned that trouble was flaring, and as public scepticism mounts over the official version of events, the bank's executive chairman, Daniel Bouton, and heir-apparent Jean-Pierre Mustier face a very uncertain future.

"The old adage is you are damned if you don't know or if you do know. There is very little escape from this and it involves looking outside for new blood," said Ian Harnett, head of Absolutely Strategy, who used to work for SocGen in London.

Bouton told a French newspaper over the weekend that Kerviel was able to keep one step ahead of his supervisors for months by manipulating fictitious trades and evading checks like "a mutating virus."

But a growing number of people are openly challenging this account of what happened.

"No one can believe one person could run up losses and that no one else would have known," said Simon Maughan at MF Global in London. "There is a real risk of this escalating a good deal further from here."

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