Financial consulting firm PricewaterhouseCoopers will pay $25 million for failing to report on money-laundering activities at the Bank of Tokyo-Mitsubishi UFJ.
New York's Department of Financial Service settled with the consulting firm for softening its report on the Bank of Tokyo-Mitsubishi UFJ's dealings with countries blacklisted by the United States. The bank had hired the firm to review transactions with Iran and other countries including transfers made form its New York office.
PwC submitted a report on the bank's transactions to U.S. regulators, saying it was objective and impartial work. But as part of the investigation, the firm was accused of "improperly altering" the report.
While drafting the report, the consultancy firm asked its employees to use "special instructions" to not draw attention while dealing with transactions from Iran and other countries sanctioned by the U.S. But under pressure from the bank, the firm deleted those paragraphs in the final version of the report.
The firm has not been found in violation of any laws, but has been accused of failing to be objective.
The case is part of a broader investigation into the consulting industry's relationships with big banks. Regulators expect such firms to provide objective assessments on the activities of a bank, but have lately seen observing firms indulging in questionable activities.
"We are continuing to find examples of improper influence and misconduct in the bank consulting industry," said Benjamin Lawsky, superintendent of New York's Department of Financial Services "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."