Powered by MOMENTUM MEDIA
subscribe to our newsletter

Societe Generale pleads guilty to client money offences

The financial institution has admitted to breaching its licensing obligations after it deposited client funds in unauthorised deposit accounts.

Societe Generale Securities Australia (SGSA) – a division of France-based bank Societe Generale – has pleaded guilty to four separate charges of breaching client money provisions, after it was revealed that it had deposited client money into unauthorised bank accounts between December 2014 and February 2017.

Specifically, the financial institution admitted to:

  • two counts of breaching s993B(1) of the Corporations Act, by receiving money in connection with financial services, and then failing to pay that money into an account that satisfied the client money requirements; and
  • two counts of breaching s993C(1) through making payments out of a client money account that were not permitted by reg 7.8.02 of the Corporations Regulations.

Each offence carries a maximum penalty of 250 penalty units (approximately $45,000).

A sentence is set to be handed down on 21 September 2020.

Advertisement
Advertisement

Last month, the Australian Securities and Investments Commission (ASIC) imposed additional conditions on the Australian Financial Services Licence (AFSL) of SGSA Australia in light of the charges.

In a bid to ensure compliance with the client money obligations under the Corporations Act 2001 and client money regulations, Societe Generale must now appoint an independent expert to assess its compliance practices, systems and processes.

The independent expert will be responsible for identifying any deficiencies and outlining any remedial action required in a report provided to both Societe Generale and ASIC.

The additional licensing conditions will also require Societe Generale to provide ASIC with attestations from a qualified senior executive and a board member, which confirm all remedial actions recommended by the independent expert have been adopted and implemented.

If the financial institution fails to provide attestations, it must:

PROMOTED CONTENT


  • cease onboarding new customers if the onboarding involves receiving client money from or for the benefit of the customer; and
  • refrain from charging brokerage fees in relation to any futures transactions executed, to the extent that the transactions involve receiving client money in Australia.

Societe Generale received a foreign ADI licence from the Australian Prudential Regulation Authority in May 2019.

The ADI licence enables it to conduct banking business in Australia, with the exception of receiving retail deposits – as per the conditions of a foreign ADI licence.

The French financial institution operates across a range of global networks, including the Asia Pacific, where it has been active since 1867.  

Societe Generale opened its first Australian office in 1981, located in Sydney, where it has provided products and services in the areas of financial advisory and global markets.

[Related: ASIC clamps down on Societe Generale]

Societe Generale pleads guilty to client money offences
pleads guilty
mortgagebusiness

Latest News

The percentage of young adults looking to pay down their home loans has risen over the past five months, according to new data. ...

Despite the Reserve Bank digging its heels in on the timing of its cash rate climb, Westpac economists have predicted the right conditions w...

Customer-owned banks operate around four branches per $1 billion in assets, while the big four collectively run less than one shopfront per ...

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

When do you expect the cash rate to start increasing?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.