March 12, 2008 / 4:34 PM / 11 years ago

SocGen Faces Investor Lawsuit Over Losses

NEW YORK (Reuters) - A U.S. shareholder sued Societe Generale (SOGN.PA) on Wednesday, alleging the French bank misled investors about its exposure to subprime loans and failed to act on information about trades by Jerome Kerviel.

Phillip Barkett, a Missouri resident who bought SocGen American Depository Receipts, sued the bank, Chief Executive Daniel Bouton and director Robert Day in U.S. District Court in Manhattan, according to the complaint provided to Reuters by the law firm Cohen Milstein Hausfeld & Toll.

The complaint alleges that the defendants made false and misleading statements and concealed material adverse information regarding SocGen’s internal controls and exposure to subprime loans and collateralized debt obligations.

In January, SocGen, France’s second-biggest listed bank, unveiled 4.9 billion euros ($7.53 billion) of losses which it blamed on rogue deals carried out by Kerviel, a 31-year-old junior trader at the bank.

In February, SocGen also booked a total of 2.9 billion euros in write-downs related directly or indirectly to the credit market turmoil.

“Defendants thus gave investors no warning about the size of Societe Generale’s losses,” it said. “SocGen had a ‘culture of risk’ in which risky trading was tacitly permitted.”

A spokesman for the bank in New York did not have an immediate comment.

The lawsuit seeks to represent all purchasers of SocGen American Depositary Receipts and all U.S. purchasers of the bank’s shares on any exchange between Aug. 1, 2005, and Jan. 23, 2008, according to the complaint.

Barkett purchased 389 ADRs on April 12, 2006, and lost about $3,100, according to the complaint.

Editing by Brian Moss

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below