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  • Société Générale Sued For Bribery--Investors Don't Care 0 comments
    Apr 1, 2014 10:37 AM | about stocks: SCGLY

    Société Générale was in the spotlight Monday as allegations came from Libya's main sovereign-wealth fund that the bank paid a Panamanian-registered company, Leinada Inc., $58.5 million in bribes in order to secure over $2 billion in business from the Libyan Investment Authority (LIA). The wealth fund has alleged that it has suffered heavy losses in the deals with SocGen and, in turn, filed a $1.5 billion lawsuit against the French bank.

    In a statement, the bank stated that "The LIA's allegations are unsubstantiated and Société Générale will defend these proceedings vigorously. Société Générale also wishes to make clear that as far as it is aware, it is not under investigation by regulatory or law enforcement authorities in relation to its relationship with the LIA."

    Investors seem to be backing the bank. On the London stock exchange, shares gained 4.69% on Tuesday. It didn't help LIA's case when they stated in the court documents that they didn't know exactly how the corruption worked or who received the bribes.

    Don't you think they'd try to figure all that stuff out before they bring someone to court? Even if there is truth to the allegations, they've already given SocGen an advantage by not giving any sort of evidence. It also is to the bank's advantage that no other investigation by regulators is in place (although it wouldn't surprise me if they jumped in. I guess there's nothing left out there that could take regulators by surprise after everything that's happened in the last 5 years).

    I imagine investors aren't going to give up on Société Générale anytime soon, though. The bank's shares are up 75% over the last year as the financial market crisis in Europe is lessening, and not even this seems to be able to slow it down.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: SCGLY
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