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Updated Summary Of Miscreants In Global Financial Industry

Tom Burroughes, Group Editor , 2 May 2019


Here is an updated list of banks and other firms that have been punished for various offences, such as breaches of sanctions.

The “naughty corner” for miscreant banks and other wealth management institutions is getting crowded, demonstrating why compliance is such a major spending and recruitment requirement for firms these days. Charges of interbank rate fixing, lax anti-money laundering controls and questionable pricing policies have been levelled - and in some cases punished heavily.

Some of the failings that have been punished go back several years and, as of the time of writing, firms have moved, or say they have, to clean up their act. Some firms making the headlines are aware of the work that they must embark upon to improve their reputation. These firms must engage as openly as they can with clients (and for that matter, constructive critics such as this publication). Other banks have added to risk management teams in recent months, and no doubt will continue to do so.

Recent months have seen a spate of money laundering scandals in Europe, for example, with jurisdictions such as Denmark, Malta and Latvia affected. Prominent executives at banks such as Danske and ING have resigned. 

However, it is perhaps in Australia that the most concentrated amount of trouble has erupted, with a raft of banks and wealth management firms found to have broken rules and misled consumers. The country set up a Royal Commission almost a year ago to investigate.

By way of a guide to some of the problems that have hit these firms, here is a summary of the main regulatory incidents. Not all of the cases mentioned are complete and could be subject to further action. The summary here is in no way a comment by this publication as to the specific responsibility of the firms concerned.

We also invite readers who want to comment on what is being done to improve compliance to share their thoughts with us, and they can email the editor at tom.burroughes@wealthbriefing.com


Standard Chartered 
The bank agreed to pay $639 million in a settlement with the US government over breaching sanctions against a number of countries including Iran, Sudan and Cuba. The breaches took place from June 2009 to June 2014, affecting a total of 9,355 transactions to or via the US. The department said that the settlement is part of a wider $1.1 billion settlement with federal, state, local, and UK government partners.

The settlement was reached with the US Department of the Treasury’s Office of Foreign Assets Control. The sanctions violations involved Cuba, Iran, Sudan and Syria. The UK-listed bank, which earns the bulk of its earnings in regions such as Asia and Africa, also agreed to settle its potential civil liability for apparent violations of the Zimbabwe Sanctions Regulations. The bank agreed to remit more than $18 million.

Goldman Sachs
The UK's Financial Conduct Authority fined Goldman Sachs International, part of US-listed Goldman Sachs, a total of £34.3 million ($44.9 million) for not providing accurate and timely reports of more than 200 million transactions over a period of almost 10 years. GSI failed to ensure that it provided complete, accurate and timely information in relation to approximately 213.6 million reportable transactions. It also erroneously reported 6.6 million transactions to the FCA, which were not, in fact, reportable. Altogether, over a period of nine and a half years, GSI made 220.2 million errors in its transaction reporting, breaching FCA rules. The period covered by the failings ran between November 2007 and March 2017.

Swedbank, accused of anti-money laundering failings amid a brewing financial scandal in the Nordics, fired its chief executive, Birgitte Bonnesen. The bank’s board appointed current chief financial officer, Anders Karlsson, as acting president and CEO. 

Monetary Authority of Singapore
In March 2019, MAS said that it had meted out S$16.8 million in financial penalties, almost S$700,000 in civil fines in the period from the middle of 2017 to the end of last year. The Monetary Authority of Singapore also issued 19 prohibition orders that block individuals from working in the financial industry, 37 reprimands and 223 warnings, the organisation said in its first enforcement report, issued this week. The report is issued once every 18 months. 

The bank was been fined £27.6 million ($36.6 million) by the UK Financial Conduct Authority for failings relating to 135.8 million transaction reports between November 2007 and May 2017. The bank failed to ensure that it provided complete and accurate information in relation to approximately 86.67 million reportable transactions. It also erroneously reported 49.1 million transactions to the FCA, which were not, in fact, reportable. Altogether, over a period of nine and a half years, UBS made 135.8m errors in its transaction reporting, breaching FCA rules. The FCA also found that UBS failed to take reasonable care to organise and control its affairs responsibly and effectively in respect of its transaction reporting. These failings related to aspects of UBS’s change management processes, its maintenance of the reference data used in its reporting, and how it tested whether all the transactions it reported to the FCA were accurate and complete.

Financial Conduct Authority
The FCA found that three investment firms – Newton, River & Mercantile and Hargreave Hale broke competition laws. This was the first such competition case the FCA has brought. The watchdog fined Hargreave Hale £306,300 and River and Mercantile Asset Management £108,600. The FCA has not imposed a fine on Newton Investment Management because it was given immunity under the competition leniency programme.

Julius Baer
The Swiss private bank concluded its deferred prosecution agreement with the US Department of Justice to settle a liability linked to its legacy cross-border US banking business. By fulfilling its DPA obligations, the US Attorney’s Office for the Southern District of New York filed a motion to dismiss the charges against the bank.

Morgan Gatsby
The financial services group providing services, including wealth management, was suspended from operating in Dubai by the local regulator because of “serious concerns” over a number of failings. The licence was suspended by the Dubai Financial Services Authority, the regulator for the Dubai International Financial Centre, the local jurisdiction.

In October, the country's regulator froze accounts of former clients of the Maltese bank, because of money laundering concerns, and launched a campaign warning about doing business in the Mediterranean island. Satabank ceased operations after accounts were shut down by the Malta Financial Services Authority more than a month ago. Reports said that more than 10,000 company accounts have been blocked.

Societe Generale
US authorities agreed a $1.3 billion settlement with French bank Societe Generale to resolve its breach of US sanctions against Iran, Cuba and Sudan. The settlement covered agreements by the bank with the Federal Reserve, the US Justice Department and various legal authorities in New York. The US Treasury department’s Office of Foreign Assets Control said that the Paris-based bank processed 1,077 transactions totalling more than $5.56 billion.

The European Central Bank withdrew the banking licence for Pilatus Bank, a Malta-based organisation embroiled in a money laundering scandal. European authorities tightened the screws on the bank after US authorities charged its former chairman and owner, Seyed Ali Sadr Hasheminejad, with plotting to circumvent US sanctions against Iran.


In May, Denmark’s financial regulator told Danske Bank it needed to bolster its capital by DKK5 billion ($803 million), and imposed eight orders and eight reprimands on the lender. In February, Estonia’s financial watchdog said it would open an investigation into the lender after media reports claimed it had been aware of money laundering allegations at its Estonian business as far back as 2013. Estonia’s general prosecutor has started a criminal investigation of Danske Bank – which has already been warned it needs to bolster its capital – over claims that the Danish bank was involved in money laundering via the Baltic nation. The bank has seen a number of high-profile figures depart as it has been hit by a money laundering scandal centred on its Estonian operations. It has employed a new compliance boss, while its recent financial results showed a fall in profits.

Credit Suisse
Switzerland’s financial regulator uncovered shortcomings around the anti-money laundering controls of Credit Suisse, such as involving suspected corruption of the global soccer organisation FIFA, and a major business relationship connected to a politically exposed person.

The Swiss Financial Market Supervisory Authority, FINMA, said that it has completed two enforcement procedures against Credit Suisse. The review covered cases originating in the period between 2006 and 2014. The Zurich-listed bank noted that “FINMA has not imposed any fine on Credit Suisse, not ordered any disgorgement of profits nor any limitation of business activities”. It said it has taken a number of steps in recent years to improve its procedures.

FINMA said it found failings in how the bank upheld AML due diligence obligations in relation to suspected corruption involving FIFA, the Brazilian oil corporation Petrobras, and the Venezuelan oil corporation Petróleos de Venezuela. In a second case, FINMA probed “a significant business relationship for the bank with a politically exposed person”. “In this instance too, FINMA identified deficiencies in the anti-money laundering process, as well as shortcomings in the bank's control mechanisms and risk management,” it said. (The PEP was not identified in FINMA's statement.)

ING agreed to pay a total of €675 million ($784.6 million) in fines and €100 million in disgorgement after admitting to money laundering lapses in a six-year period. The fine is one of the largest of its type against a Netherlands-based financial organisation. The group said it acknowledged that there had been “serious shortcomings in the execution of customer due diligence policies to prevent financial economic crime at ING Netherlands in the period investigated (2010-2016)."

Standard Chartered
Standard Chartered agreed to a further extension of its US deferred prosecution agreements (DPAs) until the end of December 2018. The group entered into the DPAs with the US Department of Justice and the New York County District Attorney’s Office in December 2012, accepting that it had broken laws by processing payments for sanctions targets in countries including Iran, Burma, Sudan and Libya. The bank avoided prosecution in exchange for a cash settlement of $327 million and an agreement with the US authorities to improve its sanctions compliance.

A US regulator rapped UBS for a series of deficiencies in its anti-money laundering systems in its New York, Connecticut and Florida branches. The Office of the Comptroller of the Currency, which censured the world’s biggest wealth manager, did not, however, impose a financial penalty.

Commonwealth Bank of Australia
In early June, CBA agreed to pay a civil penalty of A$700 million ($535.2 million) to authorities for failing to immediately report more than 53,500 suspicious transactions, one of the worst financial scandals in the country’s history. The lender said it had entered into an agreement with Austrac, the Australian Government’s financial intelligence agency, to resolve the civil proceedings commenced by the watchdog in the Federal Court of Australia on 3 August last year. The agreement, which still has to be cleared by a court, will involve the largest fine of its kind in Australian history. 

At the heart of the affair are late filings of 53,506 Threshold Transaction Reports for cash deposits through Intelligent Deposit Machines (IDMs). The bank also inadequately followed risk assessment requirements on IDMs on 14 occasions. Transaction monitoring did not operate as intended on a number of accounts from October 2012 and October 2015. Some 149 Suspicious Matter Reports were filed late or were not filed as required. Due diligence tests on clients were broken in the case of 80 customers. Senior executives have left the bank, including its chief executive, Ian Narev, who brought forward his retirement, and was replaced by Matt Comyn.

Australia and New Zealand Banking Group 
In April, ANZ was ordered to pay A$3 million and submit regular reviews of its systems and processes after billing thousands of wealth management clients for services they did not receive. The order, imposed by ASIC, also requires ANZ to provide an audited attestation from senior management to show “reasonable assurance” that the lender has, since 2014, provided clients with documented annual reviews. In addition, the bank must demonstrate that it has improved its compliance functions.

Employees’ testimonies to the Royal Commission revealed that AMP had charged clients for advice they never received and then lied to the Australian Securities and Investment Commission (ASIC) about the practice for nearly 10 years. The chief executive of AMP, Craig Meller resigned in April after a probe revealed that his firm had engaged in widespread misconduct. Meller had been the chief executive since 2014. Shares in AMP have slid since the main revelations emerged. The firm has been hit with multiple class-action lawsuits by irate shareholders.

Dover Financial Advisers
The 400 advisor-strong group, with about $2.3 billion in assets under management, is closing down. It had been under investigation by the ASIC since last year, with the heat intensifying under the Royal Commission’s own scrutiny. Dover and owner Terry McMaster have ceased operations after receiving notice of a hearing into suspending or cancelling its licence.

The bank must defend how it structures its private wealth unit’s employment contracts after a group of 15 former advisors sued it. A statement of claim, lodged with the Federal Circuit Court of Australia in June 2018, alleges a string of breaches of the Fair Work Act by Macquarie's banking division (source: Australian Financial Review). This publication has sought further comment. AFR said potential breaches relate to claims of underpaying advisors' entitlements spanning their annual leave, public holidays, leave loading and compassionate and carer's leave. The group of former private client advisors claims Macquarie failed to comply with National Employment Standards and the modern award covering the banking, finance and insurance industry. The John Wardman-led group is seeking reimbursement for total underpayments of A$2.6 million plus interest, penalties and legal costs and also wants Macquarie to be issued with pecuniary fines.

Malta’s financial regulator froze transactions by Pilatus Bank, which is registered in the island, following news that the lender’s chairman has been arrested by US authorities for allegedly helping to breach sanctions against Iran. Ali Sadr Hasheminejad, 38, faces charges concerning his alleged involvement in helping funnel Iranian funds through the US financial system. Pilatus, which is registered in Malta and has an office in London, has been registered with the Malta Financial Services Authority since 2013, and was granted a licence in 2015.

The watchdog ordered that Sadr be immediately removed from his position of bank director and from any other executive positions he holds at Pilatus; it also suspended his voting rights as a bank shareholder. Further, MFSA said Pilatus must not allow “any banking transactions, including withdrawals or deposits held with the bank by the shareholder, members of the board of directors and senior management officials of the bank, or related persons thereto, whether direct or indirect”.

HSBC will pay $100 million to terminate US litigation alleging that the bank conspired to rig Libor, the key benchmark interest rate.

US authorities fined US Bancorp more than $600 million and charged it with two criminal violations of the Bank Secrecy Act over lapses in its anti-money laundering (AML) regime. The US’ fifth-largest bank by assets ran its AML program “on the cheap” by capping staff numbers and placing hard caps on the number of alerts generated by its transaction monitors, the US Department of Justice (DoJ) said.

US Bancorp entered into a two-year deferred prosecution agreement with the US Attorney’s Office in New York, which fined it $453 million. The Office of the Comptroller of the Currency (OCC) issued a $75 million penalty, Financial Crimes Enforcement Network (FinCEN) billed Bancorp $70 million, and the Federal Reserve $15 million, totalling $613 million.

The US Department of Justice charged eight individuals from three banking giants over allegations that they manipulated the futures markets for precious metals and share indexes, through a process known as “spoofing”. UBS, the world’s largest wealth manager, HSBC and Deutsche Bank paid a combined total of $46.6 million to settle the charges against them. Seven of the individuals charged are traders and one is a technology consultant. Spoofing refers to traders submitting, then cancelling, orders on futures contracts to manipulate the quoted price.


Edmond de Rothschild
Luxembourg officials fined the local arm of Swiss private bank Edmond de Rothschild more than $10 million, and media reports have claimed that the penalty is linked to a Malaysian scandal-hit fund. The Commission de Surveillance du Secteur Financier (CSSF) said in a statement that Edmond de Rothschild had been fined nearly €9 million ($10.1 million) for failing to implement adequate safeguards against money laundering.

Credit Suisse, UOB
Singapore's financial regulator fined Credit Suisse and United Overseas Bank S$700,000 ($504,391) and S$900,000 respectively for breaches of money laundering and terror financing regulations linked to transactions around Malaysia's state-run 1MDB fund. It also banned a number of employees at banks involved in the matter. The fines were announced by the Monetary Authority of Singapore after it completed its two-year review of banks involved in 1MDB-related transactions known to date. It described the probe as its biggest-ever investigation of illicit money flows. Already, Falcon Private Bank and the Singapore arm of BSI have been ordered to cease operations in the Asia city state. Financial penalties of S$29.1 million in aggregate have been imposed on eight banks (BSI Bank, Falcon Bank, DBS, UBS, Standard Chartered Bank, Coutts, Credit Suisse and UOB) for various breaches of AML requirements.

United Overseas Bank and Credit Suisse
Singapore's financial regulator has fined Credit Suisse and United Overseas Bank S$700,000 ($504,391) and S$900,000 respectively for breaches of money laundering and terror financing regulations linked to transactions around Malaysia's state-run 1MDB fund. It also announced bans on a number of employees at banks involved in the matter.

JP Morgan will pay $797.5 million to terminate all litigation brought against it on behalf of the now defunct Lehman Brothers, the collapse of which helped trigger the worst financial crisis since the 1930s.

The settlement requires approval by US bankruptcy Judge, Shelley Chapman, in Manhattan.

The payout follows JP Morgan's agreement last January to shell out $1.42 billion to resolve most other claims, in what had been an $8.6 billion lawsuit against the bank to recoup money for Lehman Brothers' creditors.

Wells Fargo Advisors has agreed to pay $35.5 million to settle a lawsuit that alleged that the firm discriminated against African-American advisors, according to a document filed in the US District Court for the northern district of Illinois.

As part of the settlement, the firm is also required to make a series of programmatic changes to its recruitment and training processes, teaming practices and leadership to enhance diversity and improve opportunities for African-American advisors.

Lance Slaughter, the lead plaintiff on the case, filed the lawsuit in September 2013 in the federal court. Slaughter, a financial advisor employed by Wells Fargo Advisors in the Washington DC area since 2005, alleged that of the company's more than 15,000 registered brokers, African-Americans are under-represented in advisor and managerial roles and are paid substantially less than those of different ethinicities.

Deutsche Bank will pay $7.2 billion to settle a case with the US Department of Justice over its sale of toxic mortgage securities in the run-up to the 2008 financial tsunami, the government agency said. 

The colossal fine represents the largest resolution for the conduct of a single entity in misleading investors in residential mortgage-backed securities, the DoJ said in a statement. Previously, the biggest penalty was paid by Citigroup in 2014, which amounted to $7 billion.

Credit Suisse will pay $2.5 billion to settle a case with the US Department of Justice over its sale of toxic mortgage-backed securities in the run-up to the 2008 financial crash, the Swiss banking giant said.

Additionally, the firm is required to provide consumer relief totalling $2.8 billion within five years. Such measures include affordable housing payments and first and second lien principal and interest forgiveness, Credit Suisse said.

As a result, the bank is released from potential civil claims by the DoJ related to its securitization, underwriting and issuance of residential mortgage-backed  securities.

Royal Bank of Scotland has set aside a further £3.1 billion ($3.9 billion) as it prepares to settle claims in the US that it mis-sold toxic mortgage-backed securities in the run up to the 2008 financial tsunami, raising its total provisions for the case to £6.7 billion.

The colossal provision means that the government-backed bank - the parent of private bank Coutts - would be unlikely to make a profit in 2016, which would mark the ninth consecutive year RBS has failed to make an annual profit.

Deutsche Bank has agreed to pay $95 million to settle a US government lawsuit alleging that the group committed tax fraud for using “insolvent” shell companies to conceal significant tax liabilities from the Internal Revenue Service in 2000, according to media reports.

According to court documents filed with the federal court in Manhattan, the Frankfurt-based lender also admitted to attempting to slap the shell companies with the tax bill for its then new stake in drug manufacturer Bristol-Myers Squibb.

The settlement resolves a lawsuit originally filed in December 2014 that sought to recoup more than $190 million in taxes, penalties and interest.

A Swiss regulator has fined Coutts SFr6.5 million ($6.57 million) over “serious breaches” of money laundering regulations relating to the scandal-hit 1Malaysia Development Berhad and is considering opening enforcement proceedings against the employees responsible.

The state-owned investment fund 1MDB is currently the subject of worldwide money laundering investigations in at least six countries, including the US, Switzerland and Singapore. In recent months, multiple indictments, penalties and jail sentences have been handed down to former bankers affiliated with the fund. Last year, BSI and Falcon Private Bank were forced to shut shop in Singapore by regulators amid the country's biggest crackdown on alleged money laundering connected to 1MDB.

“Coutts has seriously breached money laundering regulations by failing to carry out adequate background checks into business relationships and transactions associated with 1MDB,” the Swiss Financial Market Supervisory Authority (FINMA) said in a statement. As a result, the financial watchdog has ordered the private bank to shell out SFr6.5 million of “unlawfully generated profits”.

Germany's largest bank, Deutsche Bank, was fined just over £163 million ($203.5 million) by the UK financial regulator for inadequate money laundering controls over a period spanning almost three years, the largest fine the watchdog has imposed for AML lapses. Deutsche is to boost compliance-related staff this year.

The fine, of £163,076,224 was slapped on the Frankfurt-listed lender by the Financial Conduct Authority for failing to maintain an adequate AML control framework from 1 January 2012 to 31 December 2015. Not only was this the largest fine the FCA has imposed for such matters, but also greater than any AML fine set by its predecessor, the Financial Services Authority.

The bank failed to properly oversee the formation of new customer relationships and the booking of global business in the UK, the FCA said in a statement. The lender was used by "unidentified customers" to transfer approximately $10 billion, of unknown origin, from Russia to offshore bank accounts in a manner that is "highly suggestive of financial crime", the FCA said.


Australia's federal court has slapped multi-million dollar penalties on Australia and New Zealand Banking Group and Macquarie Bank after a probe conducted by the country's competition authorities revealed attempted cartel conduct.

During the relevant period of misconduct, traders employed by a number of banks in Singapore communicated through online chatrooms about daily submissions to be made to the Association of Banks in Singapore in relation to the benchmark rate for the Malaysian ringgit (ABS MYR Fixing Rate).

The ABS MYR Fixing Rate is used as a reference rate for settling non-deliverable forward contracts. Non-deliverable currencies are not freely tradeable outside the domestic economy, so a benchmark rate must be set by banks submitting their views on the appropriate rate.

Deutsche Bank
In late December, Germany’s largest bank reached a settlement in principle with the Department of Justice in the US over civil claims that the DoJ considered in connection with the bank’s issuance and underwriting of residential mortgage-backed securities and related securitization activities between 2005 and 2007.

The bank has agreed to pay a civil monetary penalty of $3.1 billion and provide $4.1 billion in consumer relief in the US. The consumer relief is expected to be primarily in the form of loan modifications and other assistance to homeowners and borrowers, other similar initiatives to be determined, and to be delivered over a period of at least five years.

The group's Puerto Rican arm has been made to pay $18.6 million in compensatory damages, interest and attorney fees to a prominent native lawyer and his wife after the US Financial Industry Regulatory Authority won the case by proving that UBS, among other lapses, made unsuitable investments on their behalf.

Falcon Private Bank, others
The Monetary Authority of Singapore said the operations of Falcon Private Bank in the city-state have been closed as a result of the investigation into its connections with the 1MDB scandal and for “serious failures in anti-money laundering (AML) controls and improper conduct by senior management at the head office in Switzerland as well as the Singapore branch.” The bank was issued with a fine of S$4.3 million ($10.2 million) for 14 breaches under the Prevention of Money Laundering and Countering the Financing of Terrorism act. The statement also detailed failings by DBS and UBS. Fines of S$1 million for DBS for 10 breaches and S$1.3 million for UBS for 13 breaches were issued.

The Monetary Authority of Singapore in early December 2016 imposed financial penalties of S$5.2 million ($3.7 million) and S$2.4 million respectively on Standard Chartered Bank, Singapore Branch and Coutts & Co Ltd, Singapore Branch for breaches of its AML requirements. Those breaches concerned transactions involving money from 1MDB, the Malaysian state-run fund allegedly used by prominent individuals to siphon off money for personal use. (The acquisition of Coutts International by Union Bancaire Privée, which was completed in early April, was an assets-only transaction and, as such, UBP does not inherit Coutts' legal issues or liabilities, a spokesperson for UBP told this publication.) Separately, MAS served notice of its intention to issue a prohibition order against Tim Leissner, a former director of Goldman Sachs (Singapore), for making false statements on behalf of Goldman Sachs (Asia), without the latter’s knowledge or consent. Leissner had overall responsibility for managing the relationship with 1MDB when Goldman Sachs was engaged by 1MDB to arrange three bond issuances from 2012 to 2013. 

BNP Paribas
BNP Paribas Wealth Management was fined HK$4 million ($515,000) by a Hong Kong regulator for overcharging clients to the tune of about HK$9.5 million for a period lasting almost two years. The fine was imposed by the Asian jurisdiction’s Securities and Futures Commission; the behaviour in question related to the period  1 January 2011 to 31 December 2013. Charges, mark-ups and fees received by the firm from around 2,300 clients were higher than those stated in documents given to customers, the regulator said. Transactions covered different types of investment products, including equities, bonds, structured products, options, swaps and funds.

The SFC said its fine would have been higher but for the fact that BNP Paribas agreed to use an independent reviewer to examine the charges; its repayment of overcharged amounts; its self-reporting of the matter, co-operation with authorities and clean disciplinary record.

BSI Bank 
In arguably one of the largest compliance cases in years, and certainly in Singaporean history, the Monetary Authority of Singapore moved to revoke the merchant banking licence of this bank, which is part of Switzerland-based BSI, for a number of infractions of AML laws and for "gross misconduct" of certain staff. The matter relates to the corruption scandal that has plagued Malaysia's state-run 1MDB fund.

A full description of the development can be found here.

Julius Baer
The bank agreed to pay a penalty of $547 million after admitting to helping American clients hide billions of dollars in offshore accounts. Julius Baer admitted to its actions in a detailed statement and US prosecutors agreed to drop charges after three years if the bank abides by the terms of the deal. In addition, two of the bank's client advisors, Daniela Casadei and Fabio Frazzetto, pleaded guilty to felony tax charges. The pair had been fugitives since 2011 when they were originally charged.

November 2015
The bank was fined £72.069 million ($108.664 million) for failing to conduct sufficient checks on ultra-high net worth clients, putting further pressure on firms to adopt best practice in "know-your-client" checks. The UK-listed banking giant arranged a £1.88 billion transaction for these clients in 2011 and 2012 without performing proper levels of due diligence on them. The UK's Financial Conduct Authority, the financial regulator, said the wealthy clients involved were “politically exposed persons” i.e. politically high risk, and therefore should have been subject to greater scrutiny.

Deutsche Bank
Deutsche Bank was ordered to pay a $258 million penalty for carrying out transactions on behalf of US-sanctioned countries, including Iran, Syria and Sudan. The banking giant set up payment processing schemes to evade US Treasury Office of Foreign Asset Control (OFAC) sanctions. From at least 1999 until 2006, Deutsche Bank conducted more than 27,200 US dollar clearing transactions worth over $10.86 billion on behalf of Iranian, Libyan, Syrian, Burmese, and Sudanese financial institutions and other entities subject to US economic sanctions. The bank was to pay $200 million to the NYDFS and $58 million to the Federal Reserve, and install an independent monitor for such violations. It also fired the six employees involved in the scheme who were still employed by the bank, and banned three additional employees from any duties involving the US operations.

Goldman Sachs
US authorities fined the firm $50 million after an employee of the Wall Street firm agreed to steal confidential regulatory and government information to use in advising a client. The New York Department of Financial Services said Goldman Sachs accepted a “three-year voluntary abstention from accepting new consulting engagements that require the NYDFS to authorise disclosure of confidential information”. 

October 2015
Crédit Agricole
Crédit Agricole Corporate and Investment Bank, a corporate and investment bank owned by French group Crédit Agricole, agreed to pay a total of $787.3 million in criminal and civil penalties and enter a deferred prosecution agreement with US authorities for violating sanctions involving Sudan and other jurisdictions. The bank entered the agreement with the US Attorney’s Office of the District of Columbia for breaches of the International Emergency Economic Powers Act (IEEPA) and the Trading With the Enemy Act (TWEA). The bank also entered into settlement agreements with the Treasury Department’s Office of Foreign Assets Control (OFAC), the Board of Governors of the Federal Reserve System, the New York County District Attorney’s Office and the New York State Department of Financial Services (DFS).  

July 2015
FCA fines
The UK's Financial Conduct Authority enforced fines of £1.23 billion ($1.92 billion) for market integrity breaches last year, according to new data from Kinetic Partners.

The regulator's recent enforcements relating to interbank rate manipulations include March's ban of Paul Robson from the UK financial services industry – the first public ban of a trader over LIBOR (the London Interbank Offered Rate) manipulations. Deutsche Bank was also ordered to fork out £227 million over its manipulation of LIBOR and EURIBOR inter-bank rates. This was a record FCA penalty for LIBOR misconduct.

Foreign exchange manipulation fines, pleas and settlements
Six of the world’s biggest banks, Barclays, Citigroup, Royal Bank of Scotland, Bank of America, UBS and JP Morgan, were hit with heavy fines for breaches of rules around the $5.3 trillion (daily turnover) global forex market, putting the need for compliance once again in the spotlight. In total, the penalties levied on the banks stand at $5.6 billion.

Barclays was hit with a with a fine totalling £1.534 billion ($2.38 billion) from US and UK regulators for failing to control practices in its foreign exchange operations. UBS entered a resolution agreement with US authorities over their investigation into alleged rigging of the foreign exchange markets, avoiding criminal prosecution and obtaining conditional immunity from prosecution. The bank admitted a charge of wire fraud and received a $203 million fine in connection to LIBOR, the inter-bank interest rate. It also agreed to pay a $342 million penalty relating to its forex business.

In the case of JP Morgan, it agreed to plead guilty to the violation of US anti-trust law and pay a fine of $550 million. The agreement was with the US Department of Justice and Federal Reserve. Royal Bank of Scotland also reached settlements with the Federal Reserve and DoJ over foreign exchange violations.

RBS agreed to enter a guilty plea pursuant to a plea agreement with the DoJ admitting that it knowingly, through one of its euro/US dollar currency traders, joined and participated in a conspiracy to eliminate competition in the purchase and sale of the euro/US dollar currency pair exchanged in the FX spot market in the US and elsewhere, in violation of the Sherman Antitrust Act. The charged conspiracy continued from as early as December 2007 to at least January 2013. RBS is charged with participating in the conspiracy from as early as December 2007 until at least April 2010. The plea agreement was subject to approval of the federal court in Connecticut that was presiding over the matter. RBS agreed to pay $395 million to the DoJ and $274 million to the Federal Reserve to resolve the investigations. RBS remained in discussions with governmental and regulatory authorities in other jurisdictions in relation to conduct in its FX business. In addition, RBS and RBS Securities have reached an agreement to settle the consolidated antitrust class action brought on behalf of plaintiffs who entered into FX transactions with RBS or other defendant banks. The agreement is subject to execution of a final settlement agreement and approval of the federal court in New York that is presiding over the matter.

Citigroup entered into settlements with the US Department of Justice and the board of governors of the Federal Reserve System to resolve investigations into its foreign exchange business. The settlement with the DoJ included a guilty plea by Citicorp, a subsidiary of Citigroup, to a violation of the Sherman Antitrust Act and fine of $925 million. The settlement with the Fed included the entry of a cease and desist order and a civil money penalty of $342 million. Citi also reached a separate agreement to settle related private US class action claims for a payment of $394 million, subject to court approval. 

Bank of America was fined $205 million. BoA avoided a guilty plea over the actions of its traders in chatrooms. Five out of the six banks (excluding Bank of America) pleaded guilty to felony charges.

November 2014
HSBC’s Swiss-based private banking unit agreed to pay $12.5 million to settle charges with the Securities and Exchange Commission for failing to register before providing cross-border brokerage and investment advisory services to US clients. HSBC Private Bank amassed as many as 368 US client accounts and collected fees totalling approximately $5.7 million for cross-border advisory and brokerage services, which it began providing more than 10 years ago.

The UK’s financial regulator slapped fines totalling £1.115 billion ($1.7 billion) on five banks for lax controls on their G10 spot foreign exchange trading operations, while US and Swiss regulators have also punished banks, ending a probe into forex benchmark-rigging. The UK regulator imposed the fines on the following banks: Citibank NA £225,575,000; HSBC, £216,363,000; JP Morgan, £222,166,000; Royal Bank of Scotland, £217,000,000, and UBS £233,814,000.

Separately, the Bank of England fired its chief currency dealer, Martin Mallett, making the saga one of the most serious financial scandals to have hit the City in years. US and Swiss regulators also investigating the issue in the world’s $5.3 trillion-a-day forex market took action. FINMA, the Swiss regulator, disgorged SFr134 million ($138 million) from UBS; and, in the US, the Commodity Futures Trading Commission has imposed a total financial penalty of over $1.4 billion on the banks.

September 2014
The bank was fined a record £37.7 million ($61.8 million) by the UK Financial Conduct Authority for failing to properly protect clients’ custody assets, in a setback for the bank following the LIBOR scandal in 2012. The FCA said in a statement that the bank’s investment arm had failed to protect client assets worth £16.5 billion between November 2007 and January 2012.

August 2014
Bank of America
The bank agreed to pay a record fine of $16.65 billion over its failure to disclose the risk to customers of its mortgage-backed securities in the run up to the financial crisis in 2008. The US Justice Department said in a statement that as part of the settlement the bank had agreed to pay $9.65 billion in cash and $7 billion in relief to struggling homeowners. The cash portion consists of a $5.02 billion civil monetary penalty and $4.63 billion in compensatory remediation payments. The fine is the largest civil settlement with a single entity in US history and relates primarily to conduct that occurred at Countrywide and Merrill Lynch prior to BoA’s acquisition of them before the financial crisis.

Standard Chartered
The bank reached a $300 million settlement with US authorities over defective anti-money laundering controls. It also faces tighter controls on certain Hong Kong and United Arab Emirates clients. The UK-listed bank said it had reached a final settlement with the New York State Department of Financial Services regarding deficiencies in the anti-money laundering transaction surveillance system at its New York branch.

The bank had to suspend dollar clearing through its New York branch for high-risk retail business clients at its SCB Hong Kong subsidiary; exit high-risk client relationships within certain business lines at its branches in the United Arab Emirates, and refuse to accept new dollar-clearing clients or accounts across its operations without prior approval from the DFS.

The firm was fined $25 million for improperly altering a report on anti-money laundering and sanctions compliance by Bank of Tokyo Mitsubishi. The New York State Department of Financial Services has also banned PwC from accepting consulting work at financial institutions regulated by the organisation for two years.

July 2014
Lloyds Banking Group
The bank was fined $370 million by UK and US authorities for the manipulation of LIBOR and other benchmark failings. The fine included $105 million by the Commodity Futures Trading Commission, approximately $178 million by the Financial Conduct Authority and $86 million from the US Justice Department. The manipulation of submissions covered by the settlements took place between May 2006 and 2009. Lloyds said in a statement that the individuals involved have either left the group, been suspended or are subject to disciplinary proceedings.

June 2014
BNP Paribas
France's largest bank was fined $8.97 billion and temporarily lost the ability to handle dollar-denominated business in the US (with clients using a third-party bank) during 2015. The bank pleaded guilty to violations of US sanctions against Sudan, Cuba and Iran. The issue has raised concerns that US authorities are treating such cases as "shakedown" operations to fill government coffers (as argued by The Economist magazine). The fines have soured US-French relations.

May 2014
Credit Suisse
The bank pleaded guilty to conspiracy to help US citizens evade taxes and agreed to pay a $2.815 billion settlement with US authorities, a move that the Swiss bank said will not affect its licences or business and operational capabilities.

April 2014
Invesco Perpetual
The Financial Conduct Authority in the UK fined Invesco Perpetual £18.6 million ($31.3 million) for exposing investors to greater levels of risk than they had been led to expect. Between May 2008 and November 2012, Invesco Perpetual did not comply with investment limits designed to protect consumers by minimising their exposure to risk. The FCA said that the rules designed to limit the risks to investors were broken on 33 occasions across 15 funds, resulting in losses of £5 million.

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