Societe Generale fined $30k
Societe Generale Securities Australia (SGSA) has been sentenced to pay a total of $30,000 after pleading guilty to four separate counts of breaching client obligations.
SGSA was sentenced in Sydney’s Downing Centre Local Court on charges brought by the Australian Investments and Securities Commission (ASIC).
SGSA was sentenced in relation to two counts of breaching s993B(1) of the Corporations Act by receiving client money in connection with financial services but failing to deposit that money into an Australian Authorised Deposit-taking Institution (ADI) or an approved foreign bank, as required under the law.
The first count took place between 8 December, 2014, and 8 February, 2017, when SGSA withdrew client money on approximately 4,636 occasions from the Australian client-segregated accounts and deposited the monies in client accounts held with Societe Generale S.A., a Hong Kong branch. The accounts held by Societe Generale S.A. Hong Kong were not held with an Australian ADI nor an approved foreign bank.
The second count took place between 30 December, 2014, and 8 February, 2017, when SGSA deposited client money into five overseas non-ADI bank accounts on approximately 7,363 occasions.
The average end-of-month total value of client-money not held in an account satisfying the requirements of the Corporations Act totalled approximately $771 million.
SGSA was sentenced for a further two counts of breaching s993C(1) of the Corporations Act, through making payments out of a client money account that were not permitted by regulations 7.8.02 of the Corporations Regulations.
Count three related to 20 occasions between 27 January, 2017, and 9 January, 2018, in which part of SGSA daily intercompany margin call/reconciliation process included withdrawing approximately $496 million in client money from client segregated accounts.
Count four took place Between 1 January, 2015, and 22 September, 2016, when a total of approximately $144,000 in bank fees and charges was improperly withdrawn from the client-segregated accounts.
The relevant withdrawals made in count three and four were not permitted withdrawals under the Regulations.
In delivering the sentence, Magistrate Atkinson, said: “In my view, despite all of the work that the company has done, there is still a need for general deterrence. Australia, in recent years, has had a banking Royal Commission and there has been action taken post that Royal Commission, and what is apparent is that a very strong message has to be sent about the need for companies to comply with legislation and regulation”.
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