Markets

Societe Generale (SCGLY) to Pay $1.4B Fine for Pending Cases

An image of rising and declining prices
Credit: Shutterstock photo

Societe Generale GroupSCGLY has agreed to pay nearly $1.4 billion to the authorities in the United States. This comes as this French banking giant decides to settle some of its long-pending legal disputes.

Of the total fine, nearly $95 million is expected to be paid to settle a dispute over violations of anti-money laundering regulations.

On the other hand, the bank said that it will pay $1.34 billion to settle allegations that it processed billions of dollars in transactions related to countries under sanctions.

The authorities that issued the fines were the Federal Reserve, the U.S. Department of Justice, the U.S. Treasury's Office of Foreign Assets Control, the New York County District Attorney's Office and the New York Department of Financial Services.

These authorities claimed that between 2003 and 2013 the bank implemented billions of dollars of illegal transactions to parties in countries like Iran, Sudan, Cuba and Libya, which were sanctioned by the United States.

Prior to this settlement, in June, the bank agreed to pay a penalty to the U.S. and French authorities for its alleged manipulation of Libor rates and transactions, involving Libyan counterparts.

Societe Generale's chief executive officer, Frederic Oudea stated, "We acknowledge and regret the shortcomings that were identified in these settlements, and have cooperated with the U.S. Authorities to resolve these matters."

He added, "These resolutions, following on the heels of the resolution of other investigations earlier this year, allow the Bank to close a chapter on our most important historical disputes."

Notably, per the U.S. Attorney's office in Manhattan, this $1.34 billion is the second-largest fine that has ever been imposed on a bank for violating U.S. sanctions.

The largest was paid by another French bank, BNP Paribas, in 2014, when it agreed to pay nearly $8.9 billion for conspiring to violate sanctions that prohibit transactions with Sudan and other regimes.

Notably, Societe Generale has also signed deferred prosecution agreements that have a probation period of three years and are subject to U.S court approval. Accordingly, following the probation period, the bank cannot be prosecuted if it abides by the terms of the agreements.

The bank informed that the fine was entirely covered by the provision for disputes booked in its accounts. In fact, the settlement will not have any additional impact on its 2018 results.

Shares of the company have lost 25.4% over the past year compared with 12.3% decline recorded by the industry it belongs to.

Societe Generale currently carries a Zacks Rank #3 (Hold).

Stocks to Consider

Some better-ranked stocks from the finance space are Old Second Bancorp, Inc. OSBC , Ares Capital Corporation ARCC and JPMorgan Chase & Co. JPM . Each of these stocks carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Over the past 60 days, the Zacks Consensus Estimate for Old Second Bancorp has increased 2.6% for the current year. The company's share price has increased nearly 10.1% in the past year.

Ares Capital Corporation's shares have gained 5.4% in a year. Further, its 2018 earnings estimates have moved 2.5% upward over the past 60 days.

Over the past 60 days, JPMorgan witnessed a 1.4% upward earnings estimate revision for the current year. Its share price has increased 12% in the past year.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

See This Ticker Free >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

JPMorgan Chase & Co. (JPM): Free Stock Analysis Report

Societe Generale Group (SCGLY): Free Stock Analysis Report

Old Second Bancorp, Inc. (OSBC): Free Stock Analysis Report

Ares Capital Corporation (ARCC): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

OSBC ARCC SCGLY JPM

Other Topics

Stocks

Latest Markets Videos