New lawsuit hits SocGen over fraud scandal

The entrance to the headquarters of French bank Societe Generale is seen in La Defense, outside Paris, January 24, 2008. REUTERS/Benoit Tessier

PARIS (Reuters) - A French lawyer acting for 100 small shareholders said on Monday he had sued French Societe Generale over the way it unbundled billions of dollars in allegedly fraudulent share deals earlier this week.

Frederik-Karel Canoy said the bank should have informed markets about its pending losses before embarking on a massive selling spree on Monday to Wednesday to unwind the 50 billion euros of uncovered futures positions built up by trader Jerome Kerviel.

Canoy told Reuters he had also filed a separate complaint about the sale of a million shares by a SocGen director of shares on January 9 and 10, disclosed in a filing.

Both complaints allege insider dealing and market manipulation, he said.

A SocGen spokesmwoman said the director, Robert A. Day, had sold shares “well before” the bank became aware of alleged fraud carried out by one of its traders, leading to heavy losses.

Canoy is already suing SocGen for negligence over the fraud.

Reporting by Tim Hepher