Bloomberg the Company

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Follow Us

Industry Products

SocGen Units Fined 2.5 Million Euros for Risk-Control Failures

Don't Miss Out —
Follow us on:

Nov. 18 (Bloomberg) -- Asset-management divisions of Societe Generale SA were fined a total of 2.5 million euros ($3.4 million) by France’s financial markets regulator for a “disorderly” approach in tackling the 2007-2008 credit crisis and for internal risk-control failures.

Societe Generale Asset Management Alternative Investments, or SGAM AI, was fined 1.5 million euros, the Autorite des Marches Financiers said in a decision posted on its website yesterday. SGAM AI used swaps with another unit, SGAM Banque, to “bypass” investment-funds regulation with “a deliberate will to dissimulate risks to which investors were exposed,” the regulator said. Societe Generale is France’s second-largest bank.

“Societe Generale acknowledges the decision taken against its old asset-management firms,” Elisa O’Neill, a Paris-based spokeswoman, said by telephone today. “These asset-management firms aren’t active any more today.”

SGAM AI’s management of the credit crisis resulted in a 232 million-euro loss in the fourth quarter of 2007 and it also had a 1.9 billion-euro “impact” on Societe Generale’s capital needs, the regulator said. SGAM AI had more than 25 billion euros under management by June 30, 2008, including quantitative asset management, exchange traded funds, active structured management and structured credit management, according to the AMF.

Separately, Societe Generale Asset Management was fined 1 million euros as it failed to maintain an “independent” risk-control department while offloading “illiquid assets” to Societe Generale’s corporate- and investment-banking unit during the 2007-2008 crisis, according to the AMF.

To contact the reporter on this story: Fabio Benedetti-Valentini in Paris at fabiobv@bloomberg.net

To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net; Edward Evans at eevans3@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.