Accessibility/Mobile Features
Skip Navigation
Skip to Content
Editorial News
Business
Classified Sites

The Canadian Press - ONLINE EDITION

PriceWaterhouseCoopers to pay $25M, suspended 2 years from new bank consulting in NY case

ALBANY, N.Y. - PriceWaterhouseCoopers will pay $25 million and face a two-year suspension from consulting for new bank clients under an agreement with New York regulators following an investigation that showed the company improperly altered a report about Bank of Tokyo Mitsubishi laundering money.

Monday's agreement followed a $250 million settlement between the bank and the same regulators last year.

New York's Department of Financial Services said its investigation showed PriceWaterhouseCoopers, under pressure from bank executives, improperly altered a report to regulators on bank wire transfers on behalf of Iran, Sudan and other countries under U.S. sanctions.

"We are continuing to find examples of improper influence and misconduct in the bank consulting industry," department Superintendent Ben Lawsky said. "When bank executives pressure a consultant to whitewash a supposedly 'objective' report to regulators — and the consultant goes along with it — that can strike at the very heart of our system of prudential oversight."

Miles Everson, U.S. advisory leader for PriceWaterhouseCoopers, said the agreement related to a single engagement completed more than six years ago in which the company searched for and identified transactions that were self-reported by the bank to regulators. Its detailed report "disclosed the relevant facts" that it learned, he said.

The resolution of the case reinforces PriceWaterhouseCoopers' commitment to meeting changes in regulatory expectations, he said.

The department said PriceWaterhouseCoopers reviewed the Tokyo bank's dollar-clearing activity and transactions that potentially should have been blocked. The company found the bank had issued special instructions to employees to strip out wire messages that would have triggered alerts, the department said. The bank had denied having such a policy only weeks earlier when meeting with regulators.

The consultant revised its draft report to delete the English translation of the bank's wire-stripping instructions and other information about it, according to the department. Versions of the report "were progressively sanitized based on changes demanded by the bank," the department said. Two PriceWaterhouseCoopers partners responsible for supervising the report are now retired.

The $25 million represents an approximation of the fees and expenses the company received for the report plus the department's investigation cost.

The regulators also noted that PriceWaterhouseCoopers withheld more than 20 per cent of one director's compensation after it came to light the director repeatedly had suggested the company stop conducting further analysis that might show bank wrongdoing. The director, presently a partner, was quoted in the settlement agreement signed Monday but was not named.

The deal requires PriceWaterhouseCoopers within a year to establish procedures that include requiring the consultant and its bank clients to submit work plans to New York regulators and that the banks consent to independent contact between the consultant and regulators.

  • Rate this Rate This Star Icon
  • This article has not yet been rated.
  • We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high. If you thought it was well written, do the same. If it doesn’t meet your standards, mark it accordingly.

    You can also register and/or login to the site and join the conversation by leaving a comment.

    Rate it yourself by rolling over the stars and clicking when you reach your desired rating. We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high.

Sort by: Newest to Oldest | Oldest to Newest | Most Popular 0 Commentscomment icon

You can comment on most stories on brandonsun.com. You can also agree or disagree with other comments. All you need to do is register and/or login and you can join the conversation and give your feedback.

There are no comments at the moment. Be the first to post a comment below.

Post Your Commentcomment icon

Comment
  • You have characters left

The Brandon Sun does not necessarily endorse any of the views posted. Comments are moderated before publication. By submitting your comment, you agree to our Terms and Conditions. New to commenting? Check out our Frequently Asked Questions.

letters

Make text: Larger | Smaller

Election 2014
Brandon Sun Business Directory
The First World War at 100
Why Not Minot?
Welcome to Winnipeg

Social Media

Canadian Mortgage Rates