Bank of Tokyo-Mitsubishi UFJ today reached a $315 million settlement with the New York State Department of Financial Services—adding to the $250 million settlement it reached with DFS last year—for misleading regulators regarding the bank’s transactions with Iran, Sudan, Myanmar, and other sanctioned entities, bringing the bank’s total monetary penalty to $565 million.

A year-long investigation conducted by DFS found that compliance executives of the bank pressured its consultant, PwC, into deleting warnings originally made to regulators in a report to DFS. Bank of Tokyo-Mitsubishi UFJ (BTMU) had hired PwC to conduct a historical transaction review report on wire transfers that the bank performed on behalf of sanctioned countries during the period of 2002 to 2007.

“BTMU employees pressured PwC into watering down a supposedly objective report on the bank’s dealings with Iran and other sanctioned countries, thereby misleading regulators,” Benjamin Lawsky, Superintendent of Financial Services, said in a statement.

In addition to the monetary penalty, BTMU also will take disciplinary action against individual compliance personnel involved in the watering down of the PwC report.

The bank’s anti-money laundering compliance manager, Tetsuro Anan, resigned after DFS demanded his BTMU terminate his employment. On multiple occasions, despite being responsible for anti-money laundering compliance, Anan asked PwC to remove from its report specific issues of material concern to regulators about the bank’s misconduct, DFS stated.

Additionally, two former compliance executives, who now work at BTMU affiliates, will be banned from conducting business with any New York banks regulated by the DFS, the agency said. Those executives are Akira Kamiya, deputy president of Mitsubishi UFJ Securities Holdings and Tetsuji Kamisawa, executive deputy president of the Defined Contribution Plan Consulting of Japan.

The bank further agreed to relocate its U.S. Bank Secrecy Act/Anti-money Laundering Compliance (BSA/AML) and Office of Foreign Assets Control (OFAC) sanctions compliance programs to New York. It further agreed that these programs will have U.S. compliance oversight over all transactions affecting the New York Branch, including those transactions performed outside the U.S. that affect the New York Branch. 

The bank’s consultant will “oversee, evaluate, and test the implementation of those programs, as well as the BSA/AML and OFAC sanctions compliance programs that operate outside the United States and relate to transactions affecting the New York Branch,” DFS stated.

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