There are reports that US regulators have opened an investigation into share sales by a board member of the French Bank Societe General.
The Wall Street Journal said the Securities and Exchange Commission was looking at sales by director and American investor Robert Day.
Quoting 'people familiar with the matter', the report said Day, and two foundations associated with him, had sold around $140m of Societe Generale shares in January, before the French bank revealed billions of euro in trading losses last month. An SEC spokesman declined to comment on the report.
Societe Generale announced losses of €4.8 billion on January 24. The bank blamed the losses on an alleged rogue trader, Jerome Kerviel, who has been charged in the case.
Earlier, France's finance minister said a failure of internal controls at SocGen contributed to the bank's multi-billion-dollar rogue trade scandal. Christine Lagarde called for tougher penalties for breaches of regulations.
'Certain internal control mechanisms at Societe Generale did not work and those that did were not always followed up with the appropriate changes,' Ms Lagarde said.
Lagarde was speaking after delivering a report on the debacle to Prime Minister Francois Fillon, in which she said the maximum fine the state banking commission can levy for breach of its rules, currently €5m, should be 'substantially increased'.
Takeover talk is now swirling around the bank, with France's top two lenders, Credit Agricole and BNP Paribas, reportedly eyeing their embattled rival.
Lagarde's 11-page report, drawn up jointly with the French central bank's oversight commission and the financial markets authority, the AMF, 'identifies several points that may have been decisive' in the run-up to the scandal, the finance ministry said in a statement.
It examines the sequence of events at the bank, its internal controls and the handling of the crisis by outside authorities, and suggests 'initial ideas for reinforcing the security of market operations.'
Lagarde stressed that the report did not aim to draw conclusions on the causes of the scandal, which is the subject of several ongoing judicial investigations. But she said it proposed a series of measures 'intended to avoid a repeat of this kind of situation.'
The report says there is 'clearly progress to be made in tackling the operational risk of fraud'. It also argues that senior managers should be 'fully involved' in preventing rogue trade incidents, and that bank control systems should devote special attention to tackling internal fraud.
Societe Generale accuses Kerviel of stealing computer codes and falsifying documents to place more than €50 billion in futures trades that were discovered on January 20. The bank was forced over three days to unwind his deals despite a slumping market, resulting in losses of €4.82 billion euros, the biggest in investment banking history.
Lagarde's report found that the bank acted 'in a professional manner' when it unwound the deals, and had duly informed the financial markets about the positions. Kerviel has told prosecutors that his bosses must have been aware of his dealings because of the profits he had generated earlier.
The embattled bank faced fresh troubles today with a trial opening in Paris involving a multi-million dollar money-laundering scam between France and Israel, that allegedly operated in the last 1990s.
Four banks, including Societe Generale, and 138 people, including the bank's chairman Daniel Bouton, are accused of turning a blind eye to a vast traffic of cheques between the two countries.
