New York’s Department of Financial Services this week suspended PwC Regulatory Advisory Services for two years for improperly altering a report submitted to regulators regarding sanctions and anti-money laundering compliance at Bank of Tokyo Mitsubishi.

The 24-month suspension prohibits PwC from accepting consulting engagements at financial institutions regulated by the New York State Department of Financial Services (NYDFS). PwC also must pay $25 million to the State of New York and “implement a series of reforms to help address conflicts of interest in the consulting industry,” the regulator stated.

NYDFS Superintendent Benjamin Lawsky indicated that more enforcement actions could be on the way. “We are continuing to find examples of improper influence and misconduct in the bank consulting industry,” he said. “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 conflicts.”

After a year-long investigation, the Department of Financial Services discovered that PwC, under pressure from Bank of Tokyo Mitsubishi (BTMU) executives, improperly altered an “historical transaction review” (HTR) report submitted to regulators on wire transfers that the bank performed on behalf of sanctioned countries and entities.

Two PwC partners responsible for supervising the HTR are now both retired. During the HTR, a PwC director who led the firm’s technology and data collection team is presently a PwC partner.

“On numerous occasions, this director made statements in emails to PwC partners and employees that elevated his apparent concern for client satisfaction over the need for objective inquiry,” the regulator stated. “No one at PwC reprimanded or even told the director that his comments were inappropriate because they drew the firm’s objectivity seriously into question.”