France’s banking regulator yesterday fined Societe Generale four million euros ($6.3m) over “grave deficiencies” in its internal controls that enabled a massive rogue trade scandal at the bank, that led to nearly $7.8 billion in trading losses announced earlier this year.

In a decision e-mailed to Reuters, the Banking Commission also reprimanded France’s second-biggest listed bank for poor supervision that led to the unauthorized trades by Jerome Kerviel, the former SocGen trader blamed for the losses earlier this year. This 31-year-old trader made his fraud by investing several billion in Futures.

The banking commission said it had also issued a formal warning to Societe Generale for failing to prevent the staggering losses of 4.9 billion euros, which it has blamed on 31-year-old trader Jerome Kerviel.

After interviewing representatives of the bank on June 20, the commission said it detected “grave deficiencies in the internal control system” that “made possible the development of the fraud and its serious financial consequences.”

“The weaknesses brought to light, in particular the deficiencies in hierarchical controls, carried on over a long period, throughout 2007, without being detected or rectified by the internal control systems,” it said.

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