SocGen hit with £1.6m fine over reporting

INVESTMENT bank Societe Generale was yesterday fined £1.6 million for "systematic financial reporting failures" at its London branch spanning more than two years.

The Financial Services Authority (FSA) said the size of the penalty reflected the "seriousness" of SocGen's breach.

The watchdog said the bank failed to submit an accurate report for about 80 per cent of transactions between November 2007 and February this year, despite repeated reminders sent to the firm.

SocGen's penalty marks the sixth such fine slapped on firms for financial reporting failures in the past year. Since last August, the FSA has hit banks, including Barclays and Credit Suisse, with fines for breaking rules on transaction reporting.

Barclays was fined 2.5m in August last year for its breach, while three European banks including Credit Suisse were fined a combined 4.2m in April.

Firms must submit data on reportable transactions by the close of business the day after a trade is made. The information is used by the financial watchdog to look for signs of market abuse and insider dealing.

It is thought the spate of fines relates to the introduction of the Markets in Financial Instruments Directive (MiFID) on 1 November 2007, which was designed to help create a level playing field for trading banks across Europe.

SocGen was given a 30 per cent discount for co-operation with the FSA and for settling at an early stage. Otherwise, it would have had to pay 2.3m.

The bank said reviews had been conducted internally and by external auditors since the rule breach was discovered.

SocGen is also awaiting the outcome of the trial against alleged French rogue trader Jerome Kerviel, who is accused of causing one of the biggest trading losses in history.