Mitsubishi Bank Fined $315 Million for Concealed Transactions

Tokyo-Mitsubishi Bank has agreed to pay a $315 million fine to a banking oversight agency in the United States. Reuters reports, citing informed sources, that this Japanese bank was penalized for providing misleading reports regarding transactions with countries sanctioned by the U.S. This inaccurate report was the basis for a previous agreement on a $250 million fine between Tokyo-Mitsubishi Bank and the New York Financial Services Department last year. At that time, the regulatory body stated that the Japanese bank had concealed information about transactions with certain countries, including Iran, Sudan, and Myanmar, from 2002 to 2007. According to an informed source, under the new agreement, Tokyo-Mitsubishi Bank is set to transfer its compliance and anti-money laundering operations to New York. This source added that several of the bank's executives were questioned during the investigation by the U.S. agency, and one of them resigned under pressure. Reuters notes that the bank's spokesperson declined to comment on the matter, and the spokesperson for the New York Financial Services Department also did not respond to requests for further clarification. According to AFP, Tokyo-Mitsubishi Bank instructed a consulting firm responsible for providing an independent report on the bank's performance to erase figures and information related to these violations. The New York Financial Services Department claims that the bank did this to cover up transactions with countries sanctioned by the U.S. The consulting firm 'PwC' concluded at the end of its year-long investigation that the bank had designated employees with 'special missions' to erase messages containing information related to sanctions violations. 'PwC' had implicitly stated in its initial report to the U.S. regulatory body that the report was written with some considerations in mind. However, under pressure from the Japanese bank, the tone of the report changed, stating that this 'comprehensive and accurate report' was correct. Benjamin Lawsky, head of the New York Financial Services Department, stated that 'Tokyo-Mitsubishi Bank pressured consulting firm employees to distort and weaken the so-called real report of the bank's transactions with Iran and other sanctioned countries, thereby misleading officials.' He added: 'We regulatory bodies must take appropriate action to reform the close relationships between banks and consulting firms, as these relationships have often led to the concealment of bank violations.' In June 2013, Benjamin Lawsky fined Tokyo-Mitsubishi Bank $250 million for trading with U.S.-sanctioned countries and subsequently assigned the investigation of the bank's operations to the consulting firm 'PwC.' In August of this year, he fined the consulting firm $25 million for poor performance in the investigation of the Japanese bank and banned it from providing consulting to U.S. financial institutions for 24 months.