Financial consulting firm PricewaterhouseCoopers (PwC) has agreed to pay US$25 million to settle New York state regulators’ allegations that it failed to report on money-laundering activities at the Bank of Tokyo-Mitsubishi UFJ.
Under pressure from BTMU executives, PwC removed a warning in an ostensibly "objective" report to regulators surrounding the bank’s scheme to falsify wire transfer information for Iran, Sudan, and other sanctioned entities, the regulator said in a statement.
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The deal also prevents the firm’s regulatory consulting unit from performing certain assignments on behalf of New York-regulated banks for two years.
New York superintendent of financial services, Benjamin Lawsky, said: "We are continuing to find examples of improper influence and misconduct in the bank consulting industry. As a regulatory community, it may well be advisable for us to take a hard look in the mirror and ask whether we are doing enough to root out and investigate this troubling web of conflicts.
"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."
The firm was not accused of a legal violation. Lawsky, who took a similar action against Deloitte last year, accused PwC of failing to demonstrate the objectivity and integrity expected of bank consultants.
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By GlobalDataThe case is part of a broader examination of conflicts of interest that plague the consulting industry. The consultants are handpicked and paid by the banks they are supposed to examine.
