France's Societe Generale hit with $1.3B in U.S. fines

One of France's largest banks, Societe Generale, is pleading guilty in the U.S. and paying a total of $1.3 billion in penalties, including a $585 million fine for bribing Libyan officials to win government investments. The bank is also paying $750 million to settle U.S. charges of manipulating a key global interest rate.

The actions were announced by the U.S. Department of Justice and the U.S. Commodity Futures Trading Commission.

Under an agreement with the Justice Department, Societe Generale will avoid criminal prosecution on charges of manipulating the London interbank offered rate, or LIBOR, and will pay a $275 million fine. The bank is paying a $475 million civil penalty in a separate settlement with the CFTC. read more »

Legg Mason Inc. Agrees to Pay $64 Million in Criminal Penalties and Disgorgement to Resolve FCPA Charges Related to Bribery of Gaddafi-Era Libyan Officials

Legg Mason Inc. a Maryland-based investment management firm, has entered into a non-prosecution agreement with the Department of Justice and agreed to pay $64.2 million to resolve the Department’s investigation into violations of the Foreign Corrupt Practices Act (FCPA) in connection with Legg Mason’s participation, through a subsidiary, in a Libyan bribery scheme.

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Richard P. Donoghue of the Eastern District of New York, Assistant Director in Charge William F. Sweeney Jr. of the FBI New York Field Office and Deputy Chief Eric Hylton of IRS Criminal Investigation made the announcement.

According to Legg Mason’s admissions, between 2004 and 2010, a Legg Mason subsidiary, Permal Group Ltd. (Permal), partnered with Société Générale S.A. (Société Générale), a multinational bank headquartered in Paris, France, to solicit business from state-owned financial institutions in Libya.  During this time, Société Générale paid bribes through a Libyan “broker” in connection with 14 investments made by Libyan state-owned financial institutions.  read more »

Facebook’s Device Partnerships Explained

The New York Times on Sunday reported on deals between Facebook and device makers that allowed the manufacturers broad access to Facebook user data over the last decade.

As the debate about Facebook’s privacy practices unfolds, here is what we know about the company’s partnerships with makers of phones, game consoles and other hardware: read more »

Former State Street executive faces U.S. fraud trial

A former executive at State Street Corp went on trial on Monday on U.S. charges that he participated in a scheme to defraud the bank’s clients by charging them secret commissions on billions of dollars in trades.

Jury selection wrapped up on Monday in Boston federal court in the case of Ross McLellan, a former executive vice president at the bank accused of committing securities fraud and wire fraud. Lawyers will deliver their opening statements on Tuesday.

McLellan is one four former employees of the Boston-based bank who have since 2016 faced charges by the U.S. Justice Department that they engaged in schemes to overcharge institutional clients, allowing State Street to earn millions of dollars.

Two of those former executives - Edward Pennings and Richard Boomgaardt - pleaded guilty in 2017 and are expected to testify at the trial, according to court papers. Assistant U.S. Attorney Stephen Frank said Boomgaardt would be the first witness. read more »

SEC fines New York firm deVere $8 million over UK pension advice conflicts

The New York investment adviser deVere USA Inc agreed on Monday to pay an $8 million civil fine to settle U.S. Securities and Exchange Commission charges it failed to disclose conflicts of interest to hundreds of clients with UK pensions.

Benjamin Alderson, 40, and Bradley Hamilton, 36, British citizens who until last year were deVere’s chief executive and a deVere manager, were also charged by the SEC with concealing the conflicts and misleading clients.

DeVere advised U.S. residents who once worked in Britain on the transfer of pension assets to overseas retirement plans that qualified for special British tax treatment.

From June 2013 to March 2016, the SEC said, deVere concealed arrangements with outside service providers related to that advice that resulted in payments to the firm.

The SEC said these arrangements gave deVere an incentive to provide advice that would lead to the payments, resulting in undisclosed compensation of $2.6 million for Alderson and $2.1 million for Hamilton.  read more »