Societe Generale fraud generates downgrade
Big French bank Societe Generale has been made to pay an early price for the $8 billion fraud perpetrated by a rogue trader, with FitchRatings downgrading the bank’s long-term issuer default rating to double A minus.
FitchRatings said the action followed the profit warning made by the bank related to the alleged fraud perpetrated by the rogue trader.
It said that while it understood that Societe Generale had been the victim of a fraud undertaken by one single trader under very specific circumstances, “the extent to which the fraudulent positions taken were concealed raises serious questions about the effectiveness of the bank’s processing systems and creates reputational risk for the group”.
The ratings house said it expected 2008 to be a difficult year for Societe Generale and was not able to determine the extent to which the erosion of the bank’s reputation in the markets would affect its ability to retain leadership in its key fixed income and equity activities.
AUTHOR
Mike Taylor
Recommended for you
ASIC has banned another two former financial advisers of MWL Financial Services of making inappropriate advice to clients regarding the Shield Master fund, following two bannings earlier this month.
Two surveys from CoreData and Vanguard have shared the level of trust the Australian public has in financial advisers, and how it has changed since the Hayne royal commission.
The Financial Advice Association Australia has stated it is “working closely” with the Financial Services Minister, Daniel Mulino, to remount the inquiry into Dixon Advisory by the Senate economics references committee.
Australian wealth manager Shaw and Partners has appointed a national head for its private wealth division, which has over 200 advisers and $40 billion in assets under management.
