Societe Generale to pay $860M to resolve bribery, interest rate manipulation charges
Socit Gnrale S.A. will pay over $860 million to resolve criminal charges in the U.S. and France alleging it had bribed Libyan officials and manipulating the LIBOR rate, the Justice Department said Monday.
The Paris-based bank is also expected to pay additional $475 million in penalties to the Commodity Futures Trading Commission in connection with the LIBOR scheme that could bring the settlement bill to more than $1 billion dollars, according to a Justice Department statement.
Socit Gnrale was charged with one count of conspiracy to violate the anti-bribery provisions of Foreign Corrupt Practices Act, one count of transmitting false commodities report.
Between 2004 and 2009, Socit Gnrale paid over $90 million in bribes to a “broker” distributed the fees to Libyan officials in order to secure investments from government institutions, the bank admitted in court documents. As a result of the bribes, Socit Gnrale obtained 13 investments and one restructuring worth roughly $3.7 million leading to $523 million in profits, the Justice Department said.
The bank also admitted that it submitted false LIBOR reports to make it look as if Socit Gnrale was borrowing money at a better interest rate than it had been, according to court documents. A senior executive at Socit Gnrale ordered the false reports to create the appearance that the bank was stronger and more creditworthy than it actually was.
“For years, Socit Gnrale undermined the integrity of global markets and foreign institutions by issuing false financial data and by fraudulently securing contracts through bribery,” said acting Assistant Attorney General John Cronan. “Today’s resolution which marks the first coordinated resolution with France in a foreign bribery case sends a strong message that transnational corruption and manipulation of our markets will be met with a global and coordinated law enforcement response.”