Washington, D.C. — The Commodity Futures Trading Commission today filed and settled charges against Société Générale S.A., a provisionally registered swap dealer, for failing to comply with certain swap dealer requirements for disclosing mid-market marks to counterparties, reporting inaccurate swap valuation data to a swaps data repository (SDR), and related supervision failures.
The order imposes a $1,500,000 civil monetary penalty on Société Générale and orders it to cease and desist from further violations of the Commodity Exchange Act and CFTC regulations, as charged, and mandates its compliance with certain undertakings, including continuing its remediation efforts and updating the CFTC on its remediation efforts and compliance. The CFTC recognizes the civil monetary penalty in this matter reflects a substantial reduction based upon Société Générale S.A.’s self-reporting of its violations to the CFTC, its substantial cooperation with the Division of Enforcement’s investigation, and its appropriate remediation.
“This is another in a series of cases the CFTC has brought highlighting the need for swap dealer registrants to have an adequate supervisory system and controls in place,” said Acting Director of Enforcement Vincent McGonagle. “Swap dealer registrants must ensure that they make complete and accurate disclosures to counterparties and accurately report swap valuation data to SDRs, and must also diligently perform their supervisory duties”.
Specifically, the order finds that between 2013 and until approximately July 2021, Société Générale failed to meet its mid-market mark disclosure requirements with respect to numerous swaps, including failing to disclose pre-trade and/or daily mid-market marks entirely and, for certain swaps, providing daily marks that were inaccurate because Société Générale adjusted them for profit, hedging, or other legally impermissible costs or adjustments. The order also finds that Société Générale failed to report certain swap valuation data to an SDR accurately. Société Générale also failed to maintain an adequate supervisory system and failed to perform its supervisory obligations diligently with respect to mid-market mark disclosures.
The CFTC thanks and acknowledges the assistance of France’s Autorité des marchés financiers and the National Futures Association with this matter.
The Division of Enforcement staff members responsible for this case are Alejandra de Urioste, Patryk J. Chudy, Lenel Hickson Jr., and Manal M. Sultan. Pamela Geraghty from the Market Participants Division assisted with this matter.