Let This Be a Warning: SocGen Sues

(Posted on 16/09/11)

Societe Generla is suing and it's giving fair warning to anyone else who crosses the line and slanders the company name. It released a statement via its solicitors. It read, in part:

"Legal action against the Daily Mail is pending...similarly legal action will
be taken against anybody who spreads unfounded rumors about our company"

It's interesting because the fictional editorial, End of the Line for the Euro, which translate into Terminus pour L'Euro, was picked up by The Mail last week and from there, it spread like a financial wildfire. By the time the Daily Mail re-ran it, it read like the truth and all disclaimers of it having been fictions was erased. As a result, Societe Generla watched its shares drop by a whopping 20% in a single day.

Even more interesting is that the setting is in the future, which makes it difficult for anyone to believe it's...well, non-fiction. Still, there are questions about Germany and whether or not the euro's been beaten down with all of the international economic fears.

There's nothing better to stir the rumor mill that a bit of truth tossed in for good measure. Every writer knows that her writing has ribbons of truth weaved into it, no matter how incredible the story is. The bit of truth in this instance, of course, is the tough economy every nation is battling.

For its part, the Daily Mail retracted its story, even though the damage had already been done. French regulators played its role in the brouhaha by placing a temporary ban on short selling bank stocks.

Whether or not the retraction will play any role in the legal proceedings is yet to be seen; many solicitors throughout the UK say probably not since the damage had already been done.