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Harry Cassin
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SocGen faces U.S., France probes for Libya payments

Société Générale said in a disclosure Monday that it is under investigation in France for possible violations of French anti-corruption law and in the United States for Foreign Corrupt Practices Act offenses.

The Paris-based bank said it received two “judicial requests” in France to produce documents about its relations with the Libyan Investment Authority.

The requests in September and October are part of a preliminary investigation opened by the French National Financial Prosecutor’s office, SocGen said.

Monday’s disclosure also said the DOJ and SEC subpoenaed SocGen and its U.S. unit in October 2016, after the DOJ issued a separate subpoena in April 2014.

Both U.S. subpoenas asked for the same documents, SocGen said. The requests targeted “potential violations of the Foreign Corrupt Practices Act in connection with certain transactions involving Libyan counterparties, including the Libyan Investment Authority.”

Monday’s disclosures came in the bank’s update to its 2016 annual report.

In May this year, SocGen paid about $1.1 billion to settle a civil lawsuit filed in London by the Libyan Investment Authority or LIA, Libya’s sovereign wealth fund.

The suit alleged the bank paid $58.5 million to a Panama-registered company controlled by associates of former Libyan dictator Muammar Gaddafi.

Last year, hedge fund manager Och-Ziff settled allegations that it bribed LIA officials in return for a $300 million investment in Och-Ziff managed funds.

Och-Ziff paid $412 million to the SEC and DOJ to settle those allegations and other FCPA charges related to several African countries.

In SocGen’s disclosure Monday, the bank said it is in settlement talks with U.S. authorities.

“It is possible, without it being certain, that the pending discussions lead to an agreement in the next weeks or months,” the bank said.

SocGen said it couldn’t provide an estimate about how much it might pay to settle the investigations. At the end of September, it had recorded €2.2 billion ($2.5 billion) as a litigation reserve.


Richard L. Cassin is the publisher and editor of the FCPA Blog.

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