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PwC's US firm fined $25 million

PwC in the United States has been fined US$25 million and banned from providing regulatory advice to NYDFS-regulated (New York State Department of Financial Services) financial institutions for two years.

News Michael Masterman 19 August 2014
— 1 minute read

The firm will also need to implement a series of reforms after improperly altering a report submitted to regulators regarding sanctions and anti-money laundering compliance at Bank of Tokyo-Mitsubishi (BTMU).


Under pressure from BTMU executives, PwC removed a warning in an ostensibly "objective" report to regulators surrounding the bank's scheme to falsify wire transfer information for Iran, Sudan, and other sanctioned entities, according to a statement released by the NYDFS.

Benjamin Lawsky, superintendent of financial services, 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 the prudential oversight system.

“We are continuing to find examples of improper influence and misconduct in the bank consulting industry. 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.”

A NYDFS investigation uncovered that PwC – under pressure from 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.

The NYDFS statement said that during the 11th month (May 2008) of a 12-month engagement (June 2007 to June 2008), PwC found that BTMU had issued special instructions to bank employees to strip wire messages of information that would have triggered sanctions compliance alerts – after the bank denied having such a policy only weeks before in a meeting with regulators.

During its 24-month suspension, PwC is required to implement a series of reforms to help address conflicts of interest in the consulting industry. The NYDFS said these reforms are modeled on a similar agreement it reached with Deloitte Financial Advisory Services in 2013 when that company was suspended for 12 months from accepting consulting engagements at NYDFS-regulated institutions.

PwC's US firm fined $25 million
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