SWX fines SocGen for trader violations
02 May 2008 | 5160 views | 0
French banking group Société Générale (SocGen) has been fined SFr30,000 by SWX Swiss Exchange for failing to monitor its traders and allowing unregistered users to access the exchange's systems.
In addition to the SFr30,000 fine, SocGen will have to pay SFr10,000 in costs, says SWX.
In a statement, SWX says the bank has violated rules for the "registration and deputisation of traders" by allowing five traders to use identification numbers that were not registered to them to access the exchange's systems.
SWX says SocGen's auditors in Paris have established that in July 2006 entries were made on its exchange system using the identification numbers of traders who were absent at the time.
In four of these cases, the entries were made by registered traders using identification numbers that were not assigned to them. Although SWX does allow this, banks are required to keep a log-book detailing all these incidents, which SocGen failed to do.
In the fifth case, entries were made on the exchange's platform by a person not registered with the SWX.
The SWX says SocGen had already been reprimanded earlier in 2006 for miss-using trader identification numbers. But despite this reprimand "the necessary measures had not been implemented" and therefore "the violation was not regarded as minor", says the exchange.
The SWX fine and details of the violations will put SocGen's trading controls under further scrutiny, particularly following the bank's failure to detect and halt the EUR5 billion rogue trading scandal that came to light earlier this year. Former junior trader Jérome Kerviel is accused of using loopholes in controls and risk management procedures to conceal fictitious transactions.
However it is not thought that this particular 2006 case involved Kerviel.