SocGen to Pay $1.3 Billion to Settle U.S. Sanctions Case

Nov 19 2018, 5:37 PMNov 19 2018, 6:02 PMNovember 19 2018, 5:37 PMNovember 19 2018, 6:02 PM

(Bloomberg) -- Societe Generale SA settled its longstanding sanctions violations case with U.S. authorities, entering a deferred prosecution agreement with federal prosecutors and paying $1.34 billion to regulators in New York and Washington.

As part of the settlement announced on Monday, France’s third-largest bank acknowledged violations of U.S. sanctions laws against Iran, Sudan and Cuba starting as far back as 2003 and extending to 2013. According to a consent order filed by New York’s Department of Financial Services, the bank executed more than 2,600 outbound payments during this period, valued at about $8.3 billion, in violation of U.S. sanctions laws.

The bank agreed to pay $1.34 billion in all to resolve the settlement, the U.S. Federal Reserve said in a statement. In addition to paying $717 million to the U.S. Justice Department, the bank will pay $420 million to New York’s Department of Financial Services, $163 million to the Manhattan District Attorney’s office, $81 million to the U.S. Federal Reserve and $54 million to the U.S. Treasury.

“Societe Generale has admitted its willful violations of U.S. sanctions laws -- and longtime concealment of those violations -- which resulted in billions of dollars of illicit funds flowing through the U.S. financial system,” said U.S. Attorney Geoffrey S. Berman in Manhattan, which announced the settlement. “Other banks should take heed: Enforcement of U.S. sanctions laws is, and will continue to be, a top priority of this office and our partner agencies.”

Maria Vullo, who leads the Department of Financial Services, said: “The absence of an effective, global sanctions-compliance infrastructure and lack of management oversight allowed Societe Generale employees to ignore the scope and applicability of laws governing economic sanctions.”

SocGen resolved two other U.S. investigations -- relating to bribery in Libya and the manipulation of interest rates -- for a total of $1.3 billion in June. Today’s settlement is the first major sanctions settlement involving a global bank during the Trump administration. In 2015, Credit Agricole SA settled a sanctions matter with U.S. authorities for $787 million.