Bank to Pay $300 Million Penalty for Failing to Fulfill Compliance Commitments

A large international bank agreed to pay a $300 Million penalty, cease lines of business, and appoint a special executive to settle regulatory allegations that it failed to implement proper anti-money laundering compliance procedures as part of 2012 settlement.  An Independent Monitor, appointed as part of a 2012 settlement with the New York State Department of Financial Services, reported that the bank’s AML compliance remediation efforts failed to detect a high number of high-risk transactions.  The Monitor reported that the new compliance procedures were inadequate, and the bank failed to engage in adequate testing or auditing of the monitoring system.  The bank agreed to appoint a “competent and responsible” executive who will report directly to the CEO to oversee the remediation.

OUR TAKE: Regulators will give no quarter when a firm fails to take the actions that it promised in a prior settlement.