SGAM's Clarification On the Société Générale Group's Fraud Case
Investors may have read the news on the Société Générale Group's ("the Bank") announcement on its uncovering of a fraud in a sub-section of its market activities, published by various newswires today. Some investors would expectedly be concerned about whether their holdings of SGAM funds have been impacted in any way.
In the interest of our clients, we have made a check with SG Asset Management today, and the following are a brief reproduction of the salient points of their response:
- The fraud-related losses in question do not relate to any Client Business nor to an authorized trading position, which continued to show positive growth in 2007.
- The Bank has audited all the trades of this section of capital market activities, and has closed the fraudulent positions and reinforced its existing internal controls. All business activities remain fully operational and ready to serve client needs.
- To maintain the Bank's financial solidity and pursue the further development of its activities and future growth, its Board has decided to launch a capital increase of EUR5.5 billion. This operation, fully underwritten by two major international banks, will enable it to raise its Tier One ratio to 8%, in accordance with the highest international standards.
Fundsupermart.com will continue to monitor the situation and will keep our investors updated of any new announcement on this issue, should any arise.