Four banks, including Societe Generale, and 138 people, including the bank's chairman Daniel Bouton, are on trial over the multi-million dollar scam that allegedly began in the late 1990s.
The other banks include Societe Marseillaise de Credit, Barclays France and the National Bank of Pakistan.
Societe Generale revealed late last month it had lost a staggering 4.8 billion euros (7.1 billion dollars) in the biggest rogue trading scandal in history.
Takeover talk is now swirling around France's third largest bank, with two French banks eyeing a possible bid on Societe Generale.
Allegations of a money laundering network stretching between France and Israel initially surfaced during an investigation into a separate fraud involving companies in the Sentier garment-making district of Paris.
Checks trafficked from France were allegedly cleared in money exchange offices or banks in Israel, where a third party can clear a check by paying a cash sum, making it difficult to trace the origin of the funds. The sums were then repatriated to French banks.
Stolen check from Israel Discount Bank
Those charged in the France-Israel scam include six rabbis, a former French prosecutor and 57-year-old Bouton, along with other banking managers.
In the case of Societe Generale, investigators cite one example in which the bank received seven million euros (10.4 million dollars) in stolen check from the Israel Discount Bank between 1997 to 2001, "knowing these influxes had a criminal origin."
All four banks are charged with contributing to money laundering and profiting from the deals. All deny the charges.
"Societe Generale and its representatives did not – either knowingly or unknowingly – participate in this system and in no way committed the crime of money laundering they are charged with," the bank's lawyer Francois Martineau said.
Bouton is accused of turning a blind eye to the check system, though his lawyers insist he knew nothing about it.
Investigators have gathered 600 tons of paperwork and evidence for the trial which is expected to last until July.
Eighty five people have already been found guilty over the case in 2004. Some of those defendants are back on trial facing new charges.