Ex-SocGen Mortgage-Bond Trader Sanctioned for DealingsJody Shenn and Heather Perlberg
A former Societe Generale SA mortgage-bond trader in New York was sanctioned by the Financial Industry Regulatory Authority for improper transactions.
Yimin Ge bought bonds from other firms with “an understanding that her counterparty would repurchase the security within a short time frame,” and on at least one occasion engaged in the opposite practice, according to an agreement accepted by Finra on Oct. 27.
Ge agreed to be barred from associating with any Finra member, without admitting or denying the agency’s findings. The industry watchdog said the trading occurred between 2011 and 2013, and that Ge prevented specific securities’ prices and volumes from “accurately reflecting market activity” and “influenced the natural forces of supply and demand in the market.”
Theodore A. Krebsbach, a lawyer at Murphy & McGonigle who represented Ge, declined to comment, as did Jim Galvin, a spokesman for Societe Generale in New York.
Regulators have been showing an interest in so-called parking schemes in the market for securitized debt. The Securities and Exchange Commission filed an administrative action in February against Thomas Gonnella, alleging he “temporarily placed securities” in the trading book of an accomplice at another firm “to avoid penalties that would affect his year-end bonus.”
Gonnella, who was a Barclays Plc trader at the time, fought the charges. An administrative law judge issued an initial decision in favor of the SEC in the case yesterday, ordering him to pay civil penalties of $82,500. His firm fired him for the misconduct, the SEC said.
“We’re very disappointed, and we’re evaluating our options,” Andrew J. Frisch, a lawyer for Gonnella, said today.
Ge was responsible for the securities arm of the French bank’s book of non-agency home-loan securities and also co-ran its collateralized loan obligations book, according to her LinkedIn profile. She joined the unit in May 2011 and her employment was terminated in June, Finra said.