Mustier leaves Société Générale after insider-trading investigation

Jean-Pierre Mustier, the former head of Société Générale Corporate and Investment Banking (SGCIB), has left the firm after the Autorité des Marchés Financiers (AMF) launched an investigation against him for insider trading.

The AMF has issued letters of grievance to Mustier and Robert Day, a managing director and chief executive of US-based investment management firm TCW, marking the opening of proceedings. An official at the bank confirmed the AMF is investigating Mustier’s personal portfolio of shares, including shares of Société Générale.

The regulator initially launched an investigation into the bank in January 2008, scrutinising the level of communication to the market regarding the likely impact of subprime exposures on the bank’s profitability in 2007 and 2008, and the marketing of the bank’s shares in the same period. The investigation has now closed, and no further action will be taken against SG. The investigation was not related to the €4.9 billion loss incurred by rogue trader Jérôme Kerviel in January 2008, a bank official said.

Mustier had planned to leave the bank by the end of December at the latest, but the announcement was enough to force his retirement. He had offered his resignation in January 2008, when the bank was rocked by the Kerviel scandal.

Kerviel, an equity index futures trader, racked up fraudulent directional trades on the Dow Jones Eurostoxx 50, Dax and FTSE 100 indexes totalling €4.9 billion by January 18, concealing his exposures by putting on fictitious offsetting trades. The scandal warranted an overhaul of the bank’s risk functions, a consolidation of its back-office functions and a strengthening of its IT security.

Mustier remained at the firm, but left the investment banking division. He moved to the bank’s asset management division in October, where he was charged with overseeing the merger with Credit Agricole’s asset management business. Since his resignation on August 6, Séverin Cabannes, deputy chief executive officer, has assumed Mustier’s responsibilities.

Mustier joined the Paris-based firm in 1987 and held numerous roles in the equity derivatives business, including global head of equity derivatives and co-head of the equity division. He has been chief executive of the debt, currencies, commodities and derivatives division, and chief executive of the debt finance division. He was in charge of SGCIB between January 2003 and October 2008. An official at the bank declined to comment on what he would do next.

See also: SG moves on
Senior management shake-up at SG
Péretié to replace Mustier at SG CIB