French bank SocGen fined over internal system failings
The French financial market regulator AMF said Friday it had fined French bank Societe Generale €300,000 ($464,000) for breaching financial industry’s rules and a suspected insider trading.
In August 2003, the Amber Fund, a Jersey-based hedge fund then belonged to Societe Generale, made a large purchase of stocks of a real estate company, Sophia, right before SocGen and a French insurance company sold a large amount of their stocks of Sophia. Societe Generale had been suspected of providing Amber with “privileged information” that led the fund to carry out the acquisitions.
AMF said that it had been unable to find evidence of insider trading of the stocks, but that SocGen’s failure to identify a potential conflict of interest and police its system from leaking sensitive information to investment decision-makers were breaches of financial rules. SocGen said it couldn’t accept the fine, as Amber Fund had been peeled off from the bank since the end of 2005.
Societe Generale was at the center of the biggest rogue trader scandal in history in January when it revealed losses of €4.9 billion ($7.55 billion), which it blamed on unauthorized trading by a single employee. (people.com.cn)
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