SocGen shares dive on US law suit news
PARIS (AFP) — Shares in Societe Generale fell more than 3.0 percent in opening deals on the Paris stock exchange after a group of US investors launched a class action law suit against the French bank.
US law firm Cohen Milstein Hausfeld and Toll filed the suit in a federal court in New York on Wedneday alleging that Societe Generale misled investors about its exposure to risky US mortgage securities and failed to clamp down on a rogue trader who ran up massive losses.
In Paris, shares in the bank fell more than 3.0 percent in opening deals before recovering slightly to trade at 69.13 euros, down 2.78 percent from the previous day's close.
The collective complaint charges that Societe Generale and its chairman and chief executive Daniel Bouton "misled investors regarding its activities and exposure in the subprime mortgage markets," the law firm said in a statement.
The defendants also were accused of insufficient controls and failure to act on information it had regarding the highly irregular and unauthorised trades of junior trader Jerome Kerviel.
Total losses attributed to Kerviel's trading were put at 4.911 billion euros by the bank, which led to a collapse in its full-year net profit to 947 million euros in 2007, down 82 percent from 2006.
