Societe Generale Securities Australia Pty Ltd has been charged by the Australian Securities and Investments Commission (ASIC) with breaching client money obligations, the regulator announced this Wednesday.
Following the charges, the securities firm appeared in the Downing Centre Local Court in Sydney on criminal charges. Among the charges are two counts of failing to pay client money into segregated authorized bank accounts and two counts of failing to comply with requirements relating to a client money bank account.
Under section 981A(1) of the Corporations Act 2001, ‘Client Money’ is money that has been paid to a financial services licensee in connection with a financial service that has, will or may be provided, or, money paid to a licensee in connection with a financial product held by a person.
Societe Generale Securities Australia is a financial services provider in equity derivative sales, prime services, and clearing. It also offers over the counter (OTC) derivatives and ASX24 futures and options, among other financial products. Its clients are wholesale clients, which means – financial institutions, hedge funds, asset managers, and corporate clients.
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ASIC: breaching client money provisions is serious misconduct
According to today’s statement, the Aussie watchdog alleges that the Australian company failed to comply with client money obligations between December 2014 and September 2018. Therefore, this is in contravention of criminal offense provisions under sections 993B(1) and 993C(1) of the Corporations Act 2001, the regulator said.
“Client money provisions protect the interests of clients of Australian financial services (AFS) licensees by separating client money from money belonging to licensees. Breaching client money provisions is serious misconduct and risks undermining investor confidence,” ASIC said today.
The maximum penalty for each of the charges is 250 penalty units, which works out to be approximately AU$45,000. The matter is now adjourned for a Case Management Hearing, which will take place on the 12th of May, 2020.