French bank Societe Generale was found guilty of "grave deficiencies" in its internal controls that enabled one of the biggest rogue-trader scandals in history. The bank was fined four million euros.
France's banking regulator Friday fined Societe Generale four million euros (6.3 million dollars) over "grave deficiencies" in its internal controls that enabled a massive rogue trade scandal at the bank.
The banking commission said in a statement it had also issued a formal warning to Societe Generale for failing to prevent the staggering losses of 4.9 billion euros, which it has blamed on 31-year-old trader Jerome Kerviel.
After interviewing representatives of the bank on June 20, the commission said it detected "grave deficiencies in the internal control system" that "made possible the development of the fraud and its serious financial consequences."
"The weaknesses brought to light, in particular the deficiencies in hierarchical controls, carried on over a long period, throughout 2007, without being detected or rectified by the internal control systems," it said.
One of France's big three banks, Societe Generale shocked the financial world in January by announcing the losses, incurred as it was forced to unwind more than 50 billion euros of unauthorised deals Kerviel is said to have made.
Kerviel turned himself in to police on January 26, two days after the bank revealed the losses, and on January 28 was charged with breach of trust, fabricating documents and illegally accessing computers.
The trader is the only person charged over the biggest rogue trade scandal in banking history but investigators have been trying to find out if he had help inside or outside the bank.
Officials said Thursday that French prosecutors are also seeking charges of complicity against Kerviel's assistant, a man in his early 20s whose name has not been released.
Date created : 2008-07-04