Enforcement Action

Total combined penalties paid by Banamex USA following criminal and regulatory investigations for violations of the Bank Secrecy Act and anti-money laundering laws and regulations reached $237.4 million this month.

The U.S. Federal Reserve and the New York Department of Financial Services in an enforcement action this week ordered the Bank of Nova Scotia and its New York agency to significantly improve its anti-money laundering operations. The bank and the branch have 60 days to jointly submit a written enhanced compliance program in the areas of corporate governance, Bank Secrecy Act and anti-money laundering compliance, customer due diligence, suspicious activity reporting and monitoring, and OFAC compliance. Details inside.

The U.S. Federal Reserve and the New York Department of Financial Services in an enforcement action this week ordered China Construction Bank and its New York branch to significantly improve its compliance operations. The bank and the branch have 60 days to jointly submit a written enhanced compliance program in the areas of Bank Secrecy Act and anti-money laundering compliance, customer due diligence, and suspicious activity reporting and monitoring. Details inside.

The Federal Deposit Insurance Corporation today imposed a civil penalty of $140 million against Banamex USA for violations of the Bank Secrecy Act and anti-money laundering laws and regulations. The FDIC imposed the penalty on the same day that Citigroup, which purchased Mexico-based Banamex in 2001, said it would be shutting down the Banamex USA unit this year. Details inside.

State Street disclosed in a filing with the Securities and Exchange Commission this week that it expects to become the subject of an enforcement action brought by the Federal Reserve and the Massachusetts Division of Banks for deficiencies in the bank’s compliance program relating to the Bank Secrecy Act, anti-money laundering regulations, and U.S. economic sanctions. Details inside.