Hong Kong's market regulator said Tuesday French bank Societe Generale is to repay over $11 million to its clients after the watchdog slammed the bank for failing to properly disclose fees to them.
The Securities and Futures Commission (SFC) said it found the bank's wealth-management customers had paid or received a different price for over-the-counter traded products than the actual price paid by the bank.
The difference between the prices paid -- in over 3,000 transactions between 2003 and 2006 -- was retained by Societe Generale as a fee, the SFC said in a statement, adding that the bank did not disclose this fee to the customers.
The regulator said the fee was variable but "excessive" in some cases.
"Regulated corporations must have proper policies and procedures to ensure that their customers are fairly, honestly and professionally treated," the SFC executive director of enforcement, Mark Steward, said in the statement.
"Relevant fees and charges need to be agreed and disclosed to customers," he added, saying the bank is "doing the right thing" for agreeing to reimburse its customers.
The SFC said the over $11 million Societe Generale agreed to pay to affected customers -- without admitting liability -- represents the full value of the fees together with interest.
Societe Generale in Hong Kong could not be reached for immediate comment.
According to the Hong Kong regulator, the bank said it changed its practices in February 2006 and that "these issues are no longer part of its practice".
Societe Generale has also agreed to an independent review of its systems and procedures at the wealth management unit in Hong Kong, according to the SFC.
One of Europe's biggest banks, Societe Generale was fined by French market regulators in 2008 for 300,000 euros ($464,000 at the time) for failing to implement internal systems designed to prevent insider trading.
The Hong Kong regulator said the latest case was referred to the SFC after an earlier investigation by the Hong Kong Monetary Authority, the southern Chinese city's de facto central bank.
The SFC in May last year also fined a unit of Bank of America-Merrill Lynch $386,000 for "inadequate systems" over the sale of two index-linked notes in 2007.
