Power, Wheat, and the Close: ASIC’s Case Against Soc-Gen

The misconduct centred on orders placed using Direct Market Access (DMA) by SocGen clients for Electricity and Wheat futures on ASX 24. According to ASIC, these orders shared a common profile:

• They were all placed in the final minutes of trading, specifically the last two minutes before market close.
• The orders were strategically sized and timed to nudge the daily settlement price (DSP).
• Those DSP movements benefitted the clients’ open positions — a textbook example of marking the close.
• The clients responsible were not active in those contracts prior to entering the orders.
• The orders occurred amid extreme market volatility driven by global supply shocks.

ASIC states that SocGen breached ASIC’s Market Integrity Rules (Futures Markets) 2017 by allowing the DMA orders to be placed when it ought reasonably to have suspected they were intended to create a false or misleading appearance with respect to the market for, or the price of, the contract.

June–November 2022 — Early Warnings

In June 2022, ASIC contacted SocGen about heightened electricity contract volatility and potential margin‑call risks. Around the same time, ASIC’s Market Integrity Update (issue 138) urged Market Participants to (i) monitor client activity that could manipulate prices and (ii) confirm surveillance alerts were calibrated and working. Later in 2022, ASIC published its 2023 Enforcement Priorities, explicitly targeting manipulation in volatile market conditions.

Link to Market Integrity Update

May 2023–February 2024 — Client Activity and ASIC Escalation

• May–July 2023:
  • Between 15 May and 13 July, a client of SocGen (Client One) placed 16 orders within a mere 15 seconds of the close in ASX 24 electricity futures. The DSP subsequently moved in a direction favourable to Client One, with movements ranging from 0.19% to 3.23%. Those DSP movements resulted in mark-to-market benefits of between $7,614 and $450,432. In the midst of this period, in June 2023, another market participant filed a suspicious activity report relating to some of the orders being placed via SocGen.
  • ASIC then called SocGen and served notices seeking information in relation to these client orders.  SocGen subsequently replied to ASIC that it had reviewed the orders and identified no issues according to the Trading Principles under Chapter 3 of ASIC’s Market Integrity Rules (MIR). Link to MIR

• October 2023:
  • On the 9th and 10th of October, another SocGen client (Client Two) entered 2 orders within the last 30 seconds of trading in wheat futures, also on ASX 24.  Similarly, the DSP shifted favourably to the client by 0.37% and 0.49%, creating a mark-to-market benefit of $101,250 and $135,000 respectively.
  • ASIC contacted SocGen twice — first to ask whether the orders raised compliance concerns and to request details of any investigation, then later with formal notices seeking information. During this time, Client Two placed another wheat futures order in the last 30 seconds of trading, with a DSP and mark-to-market benefit of 0.64% and $154,000 respectively.  SocGen responded to ASIC that it had tightened surveillance by enabling a “last‑minute of trading” alert in its platform. The bank also conduct further targeted training of their surveillance staff with respect to marking the close behaviour and introduced additional escalation protocols.  ASIC wrote back, questioning whether SocGen’s alerts and processes were sufficient to detect and address potentially manipulative trading, and called for a review of supervisory processes and remediation steps.

• January–February 2024:
  • Client Two entered a further 14 orders within 16 seconds of the close in wheat futures again, with a DSP impact again in the client’s favour.  During this third period the DSP moved by between 0.41% and 2.23%, meaning their position benefitted in the range of $37,680 to $744,975.

March 2024–September 2025 — Findings and Penalty

ASIC’s investigation concluded that SocGen’s controls were not effective in preventing the orders and that their remedial steps were insufficient.  The Market Disciplinary Panel (MDP) considered that SocGen should have reasonably suspected that the orders were placed with the intention of creating a false or misleading appearance with respect to the market.  SocGen agreed that it had breached Rule 3.1.2(1)(b)(iii) of the MIR.

Rule 3.1.2(1)(b)(iii) of the Rules provides: (1) A Market Participant must not offer to purchase or sell a Contract or deal in any Contract: (b) on account of any other person where: (iii) taking into account the circumstances of the Order, a Market Participant ought reasonably suspect that the person has placed the Order with the intention of creating, a false or misleading appearance of active trading in any Contract or with respect to the market for, or the price of, any Contract.

More than 10 alerts were generated for Clients One and Two by SocGen’s surveillance during the period in question and all were closed with no further action. The ASIC MDP were understandably concerned that SocGen’s staff did not have sufficient understanding of these markets and of the DSP process to enable them to identify the suspicious nature of the orders. It also noted that the additional training provided to surveillance staff had clearly been ineffective in helping to detect suspicious behaviour. ASIC therefore found that SocGen did not adequately respond to its concerns. Had timely action been taken, ASIC considered that the later wheat futures orders would likely not have occurred. As a result, the MDP imposed a $3.88m penalty in September 2025.

• Marking‑the‑close is a well‑documented market manipulation tactic, and 12 months prior ASIC had published its Market Integrity Update highlighting increased volatility in futures markets and urging Market Participants to monitor activity that may manipulate prices. SocGen failed to act on suspicious DMA activity, while other market participants spotted it, showing that implementing effective controls was achievable.
• SocGen was the second‑largest Market Participant on ASX 24 at the time (≈11.8% of total traded volume) and, as at December 2023, the 19th‑largest bank globally by assets. Size and sophistication bring high regulatory expectations, yet shortcomings surfaced across both their compliance framework and surveillance oversight.
• SocGen’s systems weren’t broken — they were insufficient. It appears that SocGen had surveillance capable of alerting on marking‑the‑close behaviour yet it was not enabled at first, and once enabled, analyst review fell short. Even with strong tooling, capability, calibration, and escalation matter. Compliance teams still require the effective skills to monitor and understand market abuse, regardless of technology. Without the relevant training, understanding and quality controls, SocGen left themselves open to being a conduit for market abuse.
• The most damning element isn’t the manipulation itself, it’s the regulatory déjà vu. ASIC contacted SocGen repeatedly, yet suspicious behaviour continued. That warranted internal escalation, scrutiny of the control environment, and prompt remediation. Even after further internal training clients were still able to ‘mark the close’, resulting in a penalty nearly five times larger than the one imposed by ASIC on JP Morgan in 2024. Link to JPMorgan case