The London branch of Société Générale has been fined £1,575,000 million by the Financial Services Authority (FSA) for failing to provide accurate transaction reports. The bank hadn’t submitted accurate reports for approximately 80 per cent of its reportable transactions, across all of its asset classes, for more than two years, although SocGen insists steps have now been taken to remedy the situation.
The regulatory breaches happened between November 2007 and February 2010, when SocGen either failed to report, or inaccurately reported, 18.8 million of its 23.5 million reportable transactions. These breaches occurred despite the FSA sending repeated reminders to firms of their obligations to provide accurate data and of the importance of compliance with the FSA rules on transaction reporting. Firms are required to submit data for reportable transactions by close of business the day after a trade is executed. The FSA uses this data to detect and investigate suspected market abuse including insider trading and market manipulation.
SocGen also breached FSA rules by failing to retain and have available all relevant transaction reporting data. Firms must keep all data related to financial transactions and make it available to the FSA for at least five years.
Commenting on the case, Margaret Cole, FSA director of enforcement and financial crime, said: “SocGen failed to accurately report a very high proportion of its transactions for a significant length of time. This failure is a serious breach of our rules, as it can have a damaging impact on our ability to detect and investigate suspected market abuse.”
“This is the sixth case in the last year where we have taken action against a firm for failures to make accurate transaction reports. We will continue to monitor the quality of reporting and are committed to taking action where necessary to ensure firms comply with their reporting obligations.”
SocGen co-operated fully with the FSA in the course of its investigation and agreed to settle at an early stage. In doing so it qualified for a 30 per cent discount, without which the fine would have been £2.25 million.
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