Societe Generale Securities Australia to pay $30,000 penalty for violations of client money rules
Societe Generale Securities Australia Pty Ltd (SGSAPL), the Australian securities arm of the French banking giant, has been sentenced in Sydney’s Downing Centre Local Court on charges brought by the Australian Securities and Investments Commission (ASIC) relating to breaches of client money obligations.
SGSAPL must pay a total penalty of $30,000 after pleading guilty to four separate counts of breaching client money obligations.
SGSAPL was sentenced in relation to two counts of breaching s993B(1) of the Corporations Act (the Act) by receiving client money in connection with financial services but failing to deposit that money into an Australian Authorised Deposit-taking Institution (ADI) or an approved foreign bank, as required under the law.
The first count took place between 8 December 2014 and 8 February 2017, when SGSAPL withdrew client money on approximately 4,636 occasions from the Australian client-segregated accounts and deposited the monies in client accounts held with Societe Generale S.A., Hong Kong branch. The accounts held by Societe Generale S.A. Hong Kong were not held with an Australian ADI nor an approved foreign bank.
The second count took place between 30 December 2014 and 8 February 2017 when SGSAPL deposited client money into five overseas non-ADI bank accounts on approximately 7,363 occasions.
During the period of both counts one and two, the average end-of-month total value of client-money not held in an account satisfying the requirements of the Act totalled approximately AUD 771 million.
Count three related to 20 occasions between 27 January 2017 and 9 January 2018, in which part of SGSAPL’s daily intercompany margin call/reconciliation process included withdrawing approximately $496,777,226 in client money from client segregated accounts.
Count four took place Between 1 January 2015 and 22 September 2016, when a total of approximately AUD $144,000 in bank fees and charges was improperly withdrawn from the client-segregated accounts.
The relevant withdrawals made in count three and four were not permitted withdrawals under the Regulations.