The New York State Department of Financial Services (DFS) Tuesday levied $315 million in penalties against Bank of Tokyo Mitsubishi UFJ (BTMU) for misleading regulators regarding its transactions with Iran, Sudan, Myanmar, and other sanctioned entities.
A year-long DFS investigation found that BTMU compliance officers pressured the bank’s consultant, PricewaterhouseCoopers (PwC), into removing key warnings to regulators in a supposedly “objective” report the bank submitted to the DFS.
Under the DFS consent order, BTMU will pay the additional $315 million penalty beyond a $250 million penalty it paid under a previous June 2013 DFS agreement over its sanctioned transactions.
“As such,”the DFS said, “the total monetary penalty that BTMU has paid in this case is $565 million.”
At the direction of the DFS, the bank “will also take disciplinary action against individual BTMU compliance personnel involved in the watering down of the PwC report.”
The DFS demanded that BTMU fire Tetsuro Anan (manager, anti-money laundering compliance office, compliance division). Anan has resigned from BTMU, the DFS said.
“On multiple occasions, despite being responsible for anti-money laundering compliance, Tetsuro Anan asked PwC to remove from its report specific issues of material concern to regulators about the bank’s misconduct,” the DFS said.
The DFS also banned two former compliance officers who now work at BTMU affiliates.
Akira Kamiya (deputy president, Mitsubishi UFJ Securities Holdings) and Tetsuji Kamisawa (executive deputy president, Defined Contribution Plan Consulting of Japan) can’t do work involving any New York banks (or other financial institutions) regulated by the DFS, including BTMU’s New York branch.
Benjamin M. Lawsky, head of the DFS, said: “We continue to believe that fines — while often necessary — are not sufficient to deter misconduct on Wall Street. We must also work to impose individual accountability, where appropriate, and clearly proven, on specific bank employees that engaged in wrongdoing.”
In August, the DFS suspended PwC Regulatory Advisory Services for two years for helping whitewash the BTMU sanctions and anti-money laundering compliance report.
PwC was also required to make a $25 million payment to the State of New York.
As part of Tuesday’s order, BTMU will relocate its U.S. Bank Secrecy Act/Anti-money Laundering Compliance (BSA/AML) and Office of Foreign Assets Control (OFAC) sanctions compliance programs to New York, the DFS said.
Those programs will have U.S. compliance oversight over all transactions affecting the New York Branch, the DFS said, “including transactions performed outside the U.S. that affect the New York Branch.”
BTMU said in a statement Tuesday it is “committed to conducting business with the highest levels of integrity and regulatory compliance, and to continually improving its policies and procedures.”
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The New York State Department of Financial Services consent order In the matter of Bank of Tokyo Mitsubishi UFJ, Ltd. New York Branch dated November 18, 2014 is here (pdf).
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.