New York Announces Latest Action Against A Bank Consulting Firm


On August 18, the New York DFS announced an agreement with a bank consulting firm to resolve allegations related to certain services it performed for a bank charged last year with sanctions violations. The consulting firm allegedly altered an historical transaction review (HTR) report submitted to regulators regarding wire transfers that the bank completed on behalf of sanctioned countries and entities. At the bank’s request, the firm allegedly removed from the original HTR report key information and warning language concerning the bank’s transactions. Specifically, the DFS alleges that the firm: (i) removed the English translation of the bank’s wire stripping instructions; (ii) removed a regulatory term to describe the wire-stripping instructions and a discussion of the activities; and (iii) deleted “several forensic questions” that the firm identified as necessary for consideration in connection with the HTR report. The agreement prohibits the firm from doing business with any DFS-regulated institution for two years and requires the firm to: (i) pay a $25 million penalty; and (ii) implement certain reforms to address the conflicts of interest within the consulting industry. Those reforms are based on a similar agreement obtained by the DFS last year from another consulting firm.

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