SocGen hit by £1.57m FSA fine

Société Générale has been fined £1.575m for filing inaccurate reports to UK regulators on 80 per cent of its trades over a two-year period.

The Financial Services Authority said the French bank had failed to report or inaccurately reported 18.8m trades between November 2007 and February 2010. The reports do not affect the prices seen by customers and the market, but they are critical to the FSA’s ability to investigate insider dealing.

“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,” said Margaret Cole, FSA enforcement director.

“Firms and their management must ensure they submit quality transaction reporting data and we encourage all firms to review the integrity of this data on a regular basis,” she said.

SocGen is the sixth institution to face fines for inaccurate transaction reporting in the past year. Barclays, which had some of the longest-lasting and most serious problems, set the record last summer with a £2.45m fine. Credit Suisse, Getco, Instinet and Commerzbank have also paid penalties for similar issues.

The problems stem from the 2007 implementation of the Markets in Financial Instruments Directive, or Mifid, which imposed new reporting requirements on European Union financial institutions. The reporting systems at many banks and brokers turned out to be unable to meet these requirements.

In SocGen’s case, 320,000 trades were not reported at all, 531,000 had inaccurate date, time or trade details and 14.6m had the wrong counterparty code.

The French bank turned itself in after discovering issues with its reporting and received a 30 per cent discount for settling the case early. The bank commissioned an external review and revamped its reporting and control process.

The bank said: “We have fully co-operated with the FSA throughout their investigation and have taken and continue to take all the necessary steps to ensure that we are able to meet our transaction reporting obligations to the FSA going forward.”