Pending Cases: Societe Generale pays a fine of $1.4B

Societe Generale Group (SCGLY – Free Report) has agreed to pay nearly $1.4 billion to the authorities in the United States. This comes as this French banking giant decides to settle some of its long-pending legal disputes. Of the total fine, nearly $95 million is expected to be paid to settle a dispute over violations of anti-money laundering regulations. On the other hand, the bank said that it will pay $1.34 billion to settle allegations that it processed billions of dollars in transactions related to countries under sanctions.

The authorities that issued the fines were the Federal Reserve, the U.S. Department of Justice, the U.S. Treasury’s Office of Foreign Assets Control, the New York County District Attorney’s Office and the New York Department of Financial Services.
Implemented billions of dollars of illegal transactions
These authorities claimed that between 2003 and 2013 the bank implemented billions of dollars of illegal transactions to parties in countries like Iran, Sudan, Cuba and Libya, which were sanctioned by the United States. Prior to this settlement, in June, the bank agreed to pay a penalty to the U.S. and French authorities for its alleged manipulation of Libor rates and transactions, involving Libyan counterparts. Societe Generale’s chief executive officer, Frederic Oudea stated, “We acknowledge and regret the shortcomings that were identified in these settlements, and have cooperated with the U.S. Authorities to resolve these matters.”
He added, “These resolutions, following on the heels of the resolution of other investigations earlier this year, allow the Bank to close a chapter on our most important historical disputes.” Notably, per the U.S. Attorney’s office in Manhattan, this $1.34 billion is the second-largest fine that has ever been imposed on a bank for violating U.S. sanctions. The largest was paid by another French bank, BNP Paribas, in 2014, when it agreed to pay nearly $8.9 billion for conspiring to violate sanctions that prohibit transactions with Sudan and other regimes.
Probation period: bank cannot be prosecuted
Notably, Societe Generale has also signed deferred prosecution agreements that have a probation period of three years and are subject to U.S court approval. Accordingly, following the probation period, the bank cannot be prosecuted if it abides by the terms of the agreements. The bank informed that the fine was entirely covered by the provision for disputes booked in its accounts. In fact, the settlement will not have any additional impact on its 2018 results. Shares of the company have lost 25.4% over the past year compared with 12.3% decline recorded by the industry it belongs to.
Source: https://www.zacks.com