In what is being seen as a major setback to Societe Generale
, the Financial Services Authority (FSA) has fined the London branch of Societe Generale 1.6 million for failing to provide accurate transaction reports. The firm has repeatedly failed to provide accurate transaction reports to the FSI in the last two years.
It has been revealed that the firm did not hand over 80 per cent of its reportable transactions to the FSA over a two year period despite repeated requests to do so. This decision might set precedents for any future abnormalities relating to the disclosure of the accurate transaction reports. If analysts are to be believed many firms have defaulted on the same in the past as well.
Margaret Cole, director of enforcement and financial crime, claimed the reports are crucial to ensure that the industry is properly regulated. She 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."
Societe Generale fully co-operated with the FSA during their inquiries and agreed to settle the issue at an early stage. The fine was therefore reduced from its initial sum of 2.3 million. This is the second penalty imposed by the FSA on the UK branch of a foreign institution in as many days. The regulator had fined the British arm of Zurich Insurance a record 2.28m for losing the financial details of 46,000 customers.
Under FSA regulations, businesses are required to submit information on reportable transactions the day after a trade is made. Analysts say that the firms and their management must ensure submission of quality transaction reporting data and we encourage all firms to review the integrity of this data on a regular basis. Any default on this will invite serious penalty.