New York’s top financial enforcement chief, Benjamin M. Lawsky, fined Tokyo Mitsubishi UFJ an additional $310 million and took disciplinary action against individual bank employees – for misleading state regulators regarding its transactions with Iran, Sudan, Myanmar, and other sanctioned entities.
A year-long New York State Department of Financial Services (DFS) investigation uncovered that the bank’s employees pressured the bank’s consultant, PricewaterhouseCoopers (PwC), into removing key warnings to regulators in a supposedly “objective” report that the bank submitted to the regulators.
That report related to the extent of the bank’s illicit conduct on behalf of those sanctioned countries and entities.
“The bank’s employees pressured PwC into watering down a supposedly objective report on the bank’s dealings with Iran and other sanctioned countries, thereby misleading regulators,” Lawsky said. “It is clear that we – as a regulatory community – must work aggressively to reform the cozy relationship between banks and consultants, which far too often has resulted in shoddy work that sweeps wrongdoing under the rug.”
Under Lawsky’s order, the bank will pay an additional $315 million monetary penalty – beyond a $250 million penalty the bank’s paid in a previous June 2013 agreement over its sanctioned transactions.
The total monetary penalty that the bank has paid in this case is $565 million.
The bank will also take disciplinary action against individual BTMU compliance personnel involved in the watering down of the PwC report.
Tetsuro Anan (Manager, Anti-money Laundering Compliance Office, Compliance Division) has resigned from the bank.
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.
Two former compliance employees who now work at bank affiliates – Akira Kamiya (Deputy President, Mitsubishi UFJ Securities Holdings) and Tetsuji Kamisawa (Executive Deputy President, Defined Contribution Plan Consulting of Japan) – will be banned from conducting business involving any New York banks (or other financial institutions) regulated by the Department, including the bank’s New York branch.
“We continue to believe that fines – while often necessary – are not sufficient to deter misconduct on Wall Street,” Lawsky said. “We must also work to impose individual accountability, where appropriate, and clearly proven, on specific bank employees that engaged in wrongdoing.”