(Bloomberg) -- Societe Generale SA agreed to pay $1.34 billion to U.S. authorities to resolve allegations that it violated U.S. sanctions against Iran, Sudan and Cuba, moving past another thorny legal issue just months after two other landmark settlements.
Key Insights
- SocGen entered a deferred-prosecution agreement with the U.S. Justice Department to resolve allegations that it cleared dollar payments on behalf of Iranian customers in violation of U.S. sanctions against Tehran. The bank also settled allegations of similar conduct with New York's Department of Financial Services, the Manhattan district attorney's office, the U.S. Treasury Department and the Federal Reserve.
- The settlement is a key step for Chief Executive Officer Frederic Oudea in his effort to improve profitability and deliver dividend growth through 2020. Oudea, who shook up senior management this year, is also selling some businesses.
- Costs stemming from the sanctions-violation case will be covered by legal provisions the bank has already booked, France's third-largest bank said earlier. SocGen's penalties for breaching U.S. embargoes are just a small fraction of the almost $9 billion paid by larger rival BNP Paribas SA four years ago.
Digging Deeper
- SocGen in June agreed to pay about $1.3 billion to resolve two other cases. The bank reached pacts with U.S. and French authorities over a probe into the bribery of Libyan officials and settled a U.S. investigation into interest-rate manipulation. SocGen's settlements are among the largest against a financial institution during the Trump administration.
- The Treasury Department's Office of Foreign Assets Control administers and enforces economic and trade sanctions based on U.S. foreign-policy and national-security goals.
- SocGen said this month that existing provisions would “fully” cover the financial cost of the matter.
- The bank's underlying performance was boosted by a rebound in equity trading in the the most recent quarter.
To contact the reporters on this story: Fabio Benedetti-Valentini in Paris at fabiobv@bloomberg.net;Greg Farrell in New York at gregfarrell@bloomberg.net
To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Fabio Benedetti-Valentini, David S. Joachim
©2018 Bloomberg L.P.
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