WASHINGTON — Societe Generale was fined a total of $1.34 billion for unsafe practices that led primarily to violations of United States sanctions against Cuba, the Federal Reserve said Monday.
The French financial services firm lacked transparency, risk management and legal compliance review policies and procedures to guarantee that its activities at offices outside of the U.S. complied with regulations from the Treasury Department’s Office of Foreign Assets Control, the central bank claimed in an order requiring a civil money penalty.
Through investigations conducted by the Justice and Treasury Departments as well as the district attorney for the county of New York and the New York State Department of Financial Services, Societe Generale was found to have processed U.S. dollar fund transfers that did not include information necessary for U.S. banks to determine if the transactions were carried legally. The violations took place from at least 2007 to 2012.
Most of the violations all stem from a single revolving credit facility in Cuba, while the remaining violations involved other countries that have U.S. sanctions, including Iran, the bank said in a press release.
In all, the penalties from each of the agencies involved in the investigations and the Federal Reserve total $1.34 billion.
The Fed’s order requires Societe Generale to institute an “enhanced program to ensure global compliance with U.S. sanctions,” and prohibits the firm from rehiring or retaining the employees that were involved with the violations. The agency is also requiring SocGen to cooperate in all ongoing investigations into the case.
The bank also agreed to retain an independent consultant to evaluate its progress on an enhanced compliance program.
Societe Generale has already conducted a review of U.S. dollar transactions and has started to make changes to its Office of Foreign Assets Control compliance program, according to the agency’s order.
"We acknowledge and regret the shortcomings that were identified in these settlements, and have cooperated with the U.S. Authorities to resolve these matters,” Frederic Oudea, SocGen's CEO, said in a press release. “More broadly, these resolutions, following on the heels of the resolution of other investigations earlier this year, allow the bank to close a chapter on our most important historical disputes.”
The bank also reached a separate agreement with the New York State Department of Financial Services to pay an additional $95 million fine related to its anti-money-laundering compliance program in its New York branch.
