Aug 18 PricewaterhouseCoopers has agreed to pay
$25 million and its regulatory advisory unit will abstain from
certain consulting work for New York-regulated banks for two
years to settle accusations that it sanitized a report about
sanctions-related controls at Bank of Tokyo-Mitsubishi UFJ,
according to people familiar with the matter.
New York's Department of Financial Services, which regulates
banks in the state, is expected to announce the agreement with
PwC on Monday, one person said. The person declined to be
identified as the matter is not yet public.
In June 2013, Bank of Tokyo-Mitsubishi agreed to pay $250
million to New York State for deleting information from $100
billion in wire transfers that authorities could have used to
police transactions with Iran and other sanctioned countries.
At issue with Bank of Tokyo-Mitsubishi were 28,000
transactions the bank processed through New York between 2002
PricewaterhouseCoopers was engaged as a consultant to the
bank for a year starting June 2007, the person said. In the 11th
month of the engagement, the firm found that the bank had a
policy to strip out wire information for sanctioned clients
including Iran, Sudan and Myanmar.
PwC said it would have done a more in depth investigation
had it known the bank's policy, the person said.
But under pressure from bank lawyers and executives, the
consulting firm diluted its report to regulators about the bank
policy and stated its review was appropriate, the person said.
Information that the report was watered down could cause the
New York regulator to revisit the Bank of Tokyo-Mitsubishi
settlement, the person said.
"This matter relates to a single engagement completed more
than six years ago in which PwC searched for and identified
relevant transactions that were self-reported to regulators by
PwC's client. PwC's detailed report also disclosed the relevant
facts that PwC learned subsequent to its search process," Miles
Everson, PwC's U.S. Advisory leader said in statement.
"The firm is committed to improving continuously and meeting
changes in regulatory expectations," he added.
A Bank of Tokyo-Mitsubishi spokesman told Reuters that the
bank does not have detailed information on the matter.
The action against PwC is part of a crackdown on so-called
independent consultants by New York's financial regulator, led
by DFS superintendent Benjamin Lawsky.
In June 2013, Deloitte LLP's financial advisory unit agreed
to pay $10 million and refrain for one year from new business
with New York-regulated banks to settle accusations it watered
down a report on money laundering controls at Standard Chartered
Earlier, the British bank agreed to pay New York $340
million over its dealings with Iran and other sanctioned
countries after the regulator threatened to revoke its license
to operate in the state.
In the Deloitte case, Lawsky said he was taking a step to
ensure that consultants were "independent voices rather than
beholden to" the institutions that pay their fees.
DFS oversees certain New York banks and New York branches of
(Additional reporting by Arnab Sen in Bangalore and Taiga
Uranaka in Tokyo; Editing by Matt Driskill)