The regulator, Securities and Futures Commission (SFC), in a statement, stated that it has reprimanded Societe Generale for failings in internal controls in its wealth management activities involving secondary market transactions of over-the-counter bonds, options and structured notes.
Further, the regulator had also raised concerns that in more than 3,000 transactions undertaken between 2003 and 2006, the bank’s clients had paid or received different prices for over-the-counter traded products than the prices transacted for them by the bank, with the difference being retained as fees.
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It stated "The fee was variable and in some cases, excessive. It appears Societe Generale did not disclose this fee to the customers nor was the fee disclosed as a commission in the resulting contract notes issued to each customer."
Meanwhile, Societe Generale has informed the SFC that it had stopped such practices in February 2006.
And according to SFC, Societe Generale has also agreed to an independent review of its systems and procedures at the wealth management unit in Hong Kong.
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