Washington, D.C. – Société Générale S.A., a provisionally registered swap dealer, has been slapped with a $1.5 million penalty by the Commodity Futures Trading Commission (CFTC) for failing to accurately report swap valuation data and making misleading disclosures to counterparties. The CFTC filed and settled charges against the financial institution, alleging violations of the Commodity Exchange Act and related regulations.
The order, finalized September 29, 2021, mandates that Société Générale cease and desist from further violations and continue remediation efforts, with updates provided to the CFTC. The penalty was substantially reduced due to the company’s self-reporting of the violations, its cooperation with the investigation, and its efforts to correct the issues.
According to the CFTC, between 2013 and July 2021, Société Générale failed to provide accurate mid-market marks – benchmarks used to determine swap values – to its counterparties. In numerous instances, the company either failed to disclose these marks altogether or provided inaccurate data, adjusting them for impermissible costs like profit margins or hedging strategies. The company also reportedly failed to accurately report swap valuation data to a swaps data repository (SDR).
“This is another in a series of cases the CFTC has brought highlighting the need for swap dealer registrants to have an adequate supervisory system and controls in place,” stated Acting Director of Enforcement Vincent McGonagle. “Swap dealer registrants must ensure that they make complete and accurate disclosures to counterparties and accurately report swap valuation data to SDRs, and must also diligently perform their supervisory duties.”
The CFTC acknowledged assistance from France’s Autorité des marchés financiers and the National Futures Association in the investigation. The case was led by Alejandra de Urioste, Patryk J. Chudy, Lenel Hickson Jr., and Manal M. Sultan, with assistance from Pamela Geraghty of the Market Participants Division.
Source: CFTC.gov
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