The FCPA world was rocked last week with two enforcement actions involving illegal conduct by two separate entities and representatives of the Libyan government in regard to its sovereign wealth fund. One involved the investment adviser Legg Mason and the second involved the French banking giant Société Générale S.A. (SocGen), a global financial services institution based in Paris, France, and its wholly owned subsidiary, SGA Société Générale Acceptance N.V. SocGen paid a criminal fine of $585 million for its FCPA violations—one-half payable to the United States and one-half payable to French Parquet National Financier (PNF) in Paris relating to the Libya corruption scheme.
There was also an additional $275 million paid by SocGen for violations arising from its manipulation of the London InterBank Offered Rate (LIBOR). While it was the $585 million FCPA penalty that garnered most of the U.S. attention, the more lasting impact may well involve the LIBOR issues, as the LIBOR manipulation had C-Suite involvement by literally the highest levels at SocGen. Michele Peretie, former head of corporate banking and investment at SocGen, resigned when the scandal was uncovered “to pursue other opportunities,” and Didier Valet, former deputy chief executive, resigned earlier this year, over alleged differences in approaches to resolving the matter with the Justice Department. At the time of his resignation Valet was reported to be in line to succeed Frédéric Oudéa as SocGen’s chief executive.
