The “naughty corner” for miscreant banks and other wealth management institutions is getting crowded and also highlights why compliance is such a major spending and recruitment issue for firms these days. Charges of interbank rate fixing, lax anti-money laundering controls and questionable pricing policies have been levelled - and in some cases punished heavily.

Societe Generale

Japan’s Financial Services Agency in October ordered the suspension of Societe Generale's Japanese private banking business, after discovering “serious violations of laws and regulations”, during an inspection.

The FSA took administrative action against the French lender, after “serious problems that may impede sound and appropriate business operations were recognised, regarding the governance system, the compliance system, and the customer protection management system”.

SocGen had to suspend most of its private banking division, which meant not accepting new money and soliciting for new money, between 23 October 2012 to 22 November 2012. SocGen had also to suspend most of its trust business in the corporate division between 23 October 2012 to 22 January 2013, which the bank said is a non-core asset.

The French banking giant has also been reprimanded by Hong Kong's Securities and Futures Commission for lack of internal controls of its wealth management activities in its Hong Kong branch, leading it to reimburse customers more than $11 million (amounts are in US dollars unless otherwise stated). The SFC raised concerns that, in over 3,000 transactions undertaken between April 2003 and January 2006, customers of the bank's Hong Kong-based wealth management activities paid or received a different price for over-the-counter products, from the actual price transacted for them by SocGen, with the difference, or margin, being retained by the bank as a fee.

Barclays

UK-listed Barclays has incurred penalties from US and UK authorities totalling £290 million (around $455 million) for misconduct relating to the inter-bank interest rate market. Chief executive Bob Diamond, a high-profile character renowned for his large bonuses and hard-charging style in running the bank, has resigned. Lord (Adair) Turner, chairman of the Financial Services Authority, the UK regulator, branded the LIBOR-rigging as a huge blow to London’s reputation as a financial capital. The FSA is probing other banks; a letter sent to the New York Federal Reserve, and recently published, mentioned Lloyds Banking Group as a firm that is possibly implicated. The US Justice Department is carrying out a criminal investigation into the rate-rigging affair. Lloyds has declined to comment on the claims that it was involved.