WASHINGTON - The Securities and Exchange Commission is examining stock sales by an American board member of Societe Generale, The Wall Street Journal reported Monday.
The SEC inquiry, an expansion of one by French regulators, is investigating stock sales investor Robert Day and two foundations linked to him made days before the bank announced a $7 billion loss caused by a rogue trader. A spokesman for Day said he had promised to cooperate with any investigations.
In a story on its Web site, The Journal cited unnamed people familiar with the matter.
The Journal also said the U.S. attorney's office in Brooklyn, N.Y., had launched criminal investigation related to Societe Generale, citing a person familiar with the matter, saying its precise focus wasn't immediately clear.
Robert Nardoza, a spokesman for U.S. Attorney Benton J. Campbell, declined to comment.
The French regulatory agency said last week it opened an investigation into Societe Generale.
According to filings last week in France, Day and the charitable foundations sold shares in Societe Generale on Jan. 9, Jan. 10 and Jan. 18. The bank says it launched an internal investigation on Jan. 18, after transactions by rogue trader Jerome Kerviel raised red flags. The stock sales by Day and the foundations totaled $206 million.
Day retains a large stake in Societe Generale of around 1.9 million shares.
The bank made its bombshell-loss announcement on Jan. 24.
Day is founder and chairman of Los Angeles-based Trust Co. of the West, a firm with around $150 billion in assets under management in which Societe Generale owns a major stake.
The French regulators made no allegation of wrongdoing, but an attorney for some Societe Generale shareholders called for an investigation of illegal insider trading.
SEC spokesman John Nester declined to comment.
Societe Generale also declined comment on the Journal report. Last week, the bank said in a statement that Day sold the shares during a limited window of time in which board members are authorized to sell stock. "No inside information was used in any way," the bank's statement said. "Mr. Day, like the other board members, was not advised of Mr. Kerviel's trading losses."
The spokesman for Day, Josh Pekarsky, said in an e-mailed statement: "Mr. Day and his family's trusts and charitable foundations sold Societe Generale shares in December and January, which was a window of time where such trades were permitted under Societe Generale's trading policies. All required government disclosures were made. No inside information was used in any way with respect to these sales. Mr. Day has pledged his cooperation into any inquiries of this matter."
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