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From Banking and Finance Law Daily, November 19, 2018

French bank to pay $1.34 billion to resolve federal, state charges

By Thomas G. Wolfe, J.D.

The Societe Generale S.A. of Paris, France (SG), an international foreign bank, has agreed to pay approximately $1.34 billion in total penalties to resolve federal and state charges against the bank, stemming from investigations into SG’s alleged criminal conduct and unsafe and unsound financial practices in connection with U.S. economic sanctions against Cuba, and from alleged noncompliance with anti-money laundering rules by SG’s New York branch. Among other things, SG is claimed to have violated the Trading with the Enemy Act, Cuban Asset Control Regulations, Office of Foreign Assets Control regulations, and other federal and New York state laws. The Federal Reserve Board, U.S. Department of Justice, U.S. Treasury’s Office of Foreign Assets Control, Federal Reserve Bank of New York, New York County District Attorney's Office, and New York Department of Financial Services have worked in conjunction with each other to halt the bank’s practices and to exact the penalties. According to a Nov. 19, 2018, release by the U.S. Attorney for the Southern District of New York, in addition to having executed deferred prosecution agreements with the DOJ and the New York County District Attorney’s Office in connection with criminal charges, SG has agreed to "accept responsibility for its conduct by stipulating to the accuracy of an extensive Statement of Facts, pay penalties [totaling $1.34 billion] to federal and state prosecutors and regulators, refrain from all future criminal conduct, and implement remedial measures as required by its regulators."

In connection with the total $1.34 billion amount, along with a $717.2 million civil forfeiture to the federal government, the various agreements with the federal and state agencies call for SG to pay $162.8 million to the New York County District Attorney’s Office; $53.9 million to the Treasury’s Office of Foreign Assets Control; $81.26 million to the Fed; and $325 million to the New York Department of Financial Services.

Fed’s order. Under the terms of a draft consent order with the Fed, SG is to pay $81.26 million for SG’s unsafe and unsound practices resulting in violations of U.S. sanctions against Cuba, and for its insufficient policies and procedures to ensure that the bank’s activities conducted outside of the U.S. complied with American sanctions laws.

The Fed’s cease and desist order requires SG to implement an enhanced program to ensure global compliance with sanctions administered by the Treasury’s Office of Foreign Assets Control. Further, the order prohibits SG from re-employing the same individuals involved in past actions, retaining them as consultants or contractors, and requires the bank to "fully cooperate, and provide substantial assistance, in any ongoing investigations related to the individuals involved in the misconduct in this case."

SG’s statement. In a Nov. 19, 2018, statement, SG noted that the bank has "received significant credit from the U.S. Authorities for its cooperation during the investigation," maintaining that it "will continue to cooperate with the U.S. Authorities in the future, pursuant to the agreements." According to SG, the bank is "committed to continue to enhance its compliance program to prevent and detect potential violations of U.S. economic sanctions laws and New York state laws."

Companies: Societe Generale S.A.

MainStory: TopStory BankingOperations BankSecrecyAct CFPB CrimesOffenses DirectorsOfficersEmployers EnforcementActions FederalReserveSystem FinancialStability StateBankingLaws NewYorkNews UDAAP

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