Société Générale is to pay $11m to clients
after the bank failed to inform them about the full fees and
charges for over-the-counter bonds, options and structured notes
(OTC products).
The Hong Kong Securities and Futures
Commission (SFC) reprimanded the bank’s Hong Kong branch for the
fault in internal controls in its wealth management activities.
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Customers either paid or received different
prices for OTC products, which appear to be different to what had
initially been agreed. This was either variable or excessive and
the rest of the money was retained by Société Générale as a fee,
the HKSFC said.
The incorrect fees related to more than 3,000
transactions between April 2003 and January 2006.
Independent reviewer
to decide pay-out
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By GlobalDataSociété Générale settled the case without
admitting liability but agreed to reimburse its affected
customers.
The SFC, who raised concern about inadequacies
in Societe Generale’s guidelines, procedures and policies to ensure
disclosure of margins, said that although the bank was at fault,
they were now rectifying the issue by reimbursement.
A Société Générale spokeswoman told PBI that
the bank took the subject of customer information and internal
controls “very seriously” and since 2006 has taken action to
enhance its procedures.
The spokeswoman refused to disclose the number
of customers that had been affected but said that the bank is
planning to engage an independent reviewer to assess the amount
that should be paid out.
