BNP Paribas settlement is to come next week: source

AFP, New York

Thu, Jun 26, 2014 - Page 15

US regulators plan to announce a US$9 billion settlement with BNP Paribas next week to settle charges that the French bank violated US sanctions, a person familiar with the talks said on Tuesday.

After lengthy negotiations, the French bank, the US Department of Justice and New York state banking regulator Benjamin Lawsky have reached broad agreement on a settlement said the person, who spoke on the condition of anonymity.

BNP Paribas has agreed to a US$9 billion penalty and a suspension of its dollar-clearing functions, the person said. The length of the suspension has not yet been determined.

Also unresolved is whether the bank will plead guilty to a criminal charge and whether BNP Paribas will fire top employees whom US officials have said should be forced out, the source said.

BREACH OF SANCTIONS

The case concerns charges BNP Paribas breached US sanctions against Iran, Sudan and Cuba between 2002 and 2009 by handling US$30 billion worth of transactions with them.

Sources also confirmed that Lawsky appointed a corporate monitor within the US offices of BNP Paribas late last year to keep an eye on the bank’s activities.

The monitor is Shirah Neiman, a former deputy US attorney in Manhattan, according to a New York Times report confirmed by two sources to reporters.

Since her arrival, Neiman has demanded documents from senior bank officials and undertaken last-minute audits with no advanced warning, a source said.

CREDIT SUISSE

New York regulators are also close to appointing a corporate monitor at Credit Suisse, which in May agreed to pay US$2.6 billion and plead guilty to a charge it helped Americans evade taxes.

The likely appointee at Credit Suisse is Neil Barofsky, a former federal prosecutor who oversaw the Troubled Asset Relief Program, the federal government program launched to bail out banks amid the 2008 financial crisis, a source said.