PricewaterhouseCoopers has also been suspended from accepting consulting engagements at any NYDFS-regulated financial institution for two years, after it was found guilty of improperly altering a report submitted to US regulators regarding sanctions and anti-money laundering compliance at the Japanese bank.
Under pressure from the bank, PwC removed a warning in a, supposedly objective, report to regulators surrounding the bank’s scheme to falsify wire transfer information for Iran, Sudan, and other sanctioned entities.
The advisory service found that BTMU had issued special instructions for its bank employees to strip wire messages of information that would have triggered sanctions compliance alerts, after denying such a policy only weeks before, in a meeting with regulators.
NYDFS said PwC knew this would lead to improper data manipulation, but continued regardless, and even inserted a passage into the report stating that the contentious policy was not present within the company’s operations.
Continuing discovery
NYDFS head, Benjamin Lawsky, said the case represented just one example in its “continuing” discovery of improper influence and misconduct throughout the whole bank consultancy 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 conflict.
“When bank executives pressure a consultant to whitewash a supposedly objective report to regulators, and the consultant goes along with it, it strikes at the very heart of our system of prudential oversight.”
PwC has also been ordered to work on a “series of reforms” in order to address conflicts of interest throughout the consultancy industry.
In response, US advisory leader at PwC, Miles Everson, said: "This matter relates to a single engagement completed more than six years ago, in which PwC searched for and identified relevant transactions that were self-reported to regulators by PwC’s client.
"PwC's detailed report also disclosed the relevant facts that PwC learned subsequent to its search process.
"PwC is proud of its long history of contributing to the safety and soundness of the financial system by serving as subject matter experts in banking regulatory and compliance matters and the firm is committed to improving continuously and meeting changes in regulatory expectations. This resolution reinforces that commitment."
