New York Banking Regulator Orders Bank to Defend License Over Money Laundering Allegations

Posted on August 10th, 2012 in Banking, State Issues By BuckleySandler

On August 6, the New York Department of Financial Services (NY DFS) ordered the U.S. subsidiary of a British bank to appear on August 15 to respond to allegations of money laundering that, if true, could cost the bank its license to conduct business in New York. The order alleges that the bank engaged in deceptive and fraudulent misconduct in order to move at least $250 billion through its New York branch on behalf of client Iranian financial institutions in contravention of U.S. sanctions. While the bank acknowledges that it has been conducting a historical review of its money laundering compliance, and that it has voluntarily disclosed that review to federal agencies, it argues that the NY DFS is misinterpreting the transactions at issue and strongly refutes the allegations.