PWC fined $25m regarding Bank of Tokyo consult issues
PWC has been fined $25m (£15m) and banned from some consulting work for two years by New York State’s financial regulator because of misconduct during work at Bank of Tokyo-Mitsubishi.
The deal, agreed yesterday with New York’s Department of Financial Services, settles allegations that the accounting giant helped Japan’s biggest lender hide US sanctions violations by “improperly” altering a report submitted to regulators.
Along with the fine, PwC must abstain from undertaking consulting work at financial institutions regulated by the state department for 24 months and implement a series of reforms.
Under pressure from bank executives, PwC watered down a report on wire transfers in order to hide the bank’s dealings with blacklisted states, such as Iran and Sudan, the regulator said.
“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,” said Benjamin Lawsky, superintendent of financial services.
During the engagement, PwC is said to have uncovered “special instructions” issued by the bank to its employees to strip wire messages of information that would have triggered sanctions compliance alerts.
PwC later deleted any mention of the instructions and stated that its data was complete and its methodology was appropriate, the settlement said.
During its suspension, PwC will work to implement a series of reforms to help address conflicts of interest in the consulting industry, the regulator said. The reforms are modelled on a similar agreement it reached with Deloitte Financial Advisory Services in 2013 when DFS suspended the firm for 12-months from accepting consulting engagements at DFS-regulated institutions.
Source: accountancyage
