BNP Paribas warned over internal controls

1 December 2008

France's biggest bank, BNP Paribas, has been ordered to improve its internal controls by Japan's financial regulator in the wake of a "controversial" finance deal that external auditors believe may have broken the country's insider trading laws.

Reuters reported that the bank was also warned by the Financial Services Agency to tighten its compliance.

And although the institution was not fined over the incident, the news service said it is unclear whether or not insider trading charges could be brought at a later date.

The warning stems from a deal involving BNP Paribas' Tokyo branch. A recent report from a committee of external auditors said it may have breached insider trading regulations by trading shares in a now-defunct property development company without disclosing all the relevant information to the market, AFP stated.

Overall, the bank made a profit of around 1.18 billion yen (£8.33 million) though its trades on the company's stock, which included a number of short positions.

"It was an extremely inappropriate act which disregarded general investors and the market," the report concluded.

BNP Paribas has offices in 85 countries and employs some 171,200 people worldwide.

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development