French bank fined £1.6 million for reporting failures

The City regulator today slapped a £1.6 million fine on the London branch of investment bank Societe Generale after systematic financial reporting failures over more than two years.

The Financial Services Authority (FSA) said the size of the penalty reflects the "seriousness" of SocGen's breach.

It said the bank failed to submit an accurate report for around 80% of transactions between November 2007 and February 2010 despite repeated reminders sent to firms.

SocGen's penalty marks the sixth such fine for financial reporting failures from the FSA in the past year.

SocGen was given a 30% discount for co-operation with the FSA and for settling at an early stage. Otherwise, it would have had to pay £2.3 million.

The FSA has already hit banks including Barclays and Credit Suisse with fines since last August for breaking rules on transaction reporting.

Firms must submit data on reportable transactions by the close of business the day after a trade is made.

The information is used by the financial watchdog to look out for signs of market abuse and insider dealing.

Margaret Cole, director of enforcement and financial crime, 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."

SocGen said reviews had been conducted internally and by external auditors since the rule breach was discovered.

A spokesman for the bank's corporate and investment banking division said: "We have fully co-operated with the FSA throughout the investigation and we have taken, and continue to take, all the necessary steps to ensure that we are able to meet our transaction reporting obligations to the FSA going forward."

It is thought the spate of similar fines relate to the introduction of the Markets in Financial Instruments Directive (MiFID) on November 1 2007, which was designed to help create a level playing field for trading banks across Europe.

Barclays was fined £2.5 million last August for its breach, while the FSA fined three European banks - including Credit Suisse - a combined £4.2 million in April this year.

SocGen is also awaiting the outcome of the trial against alleged French rogue trader Jerome Kerviel, who is accused of causing one of the biggest trading losses in history.

The bank is claiming nearly £4 billion in losses from unauthorised trades made in 2008.