World

US banks subject of money laundering probe

PTI New York | Updated on September 16, 2012 Published on September 16, 2012

Regulators are investigating whether several major US banks failed to monitor transactions properly, allowing criminals to launder money, according to a New York Times story. The newspaper cited officials who it said spoke on the condition of anonymity.

The Office of the Comptroller of the Currency, the federal agency that oversees the biggest banks, is leading the money-laundering investigation, according to the Times. The report said the OCC could soon take action against JPMorgan Chase & Co., and that it is also investigating Bank of America Corp. Money laundering allows people to make money — often obtained illegally — appear like it came from another source.

The OCC didn’t immediately comment. JPMorgan and Bank of America declined to comment.

The financial industry is struggling to mend its public image. Four years after the financial crisis, banks are getting closer scrutiny. And regulators are under pressure to show that they’re not missing any questionable activity.

This summer, British bank Barclays PLC settled charges that it had manipulated a key global interest rate. Standard Chartered PLC, also based in the UK, agreed to settle charges that it had improperly processed money for Iran, brought by the New York Department of Financial Services after it voluntarily informed regulators that it was reviewing relevant practices.

In spring, JPMorgan surprised shareholders with an unexpected trading loss. And last year, the Treasury Department announced that JPMorgan would pay $88 million to settle charges that it had unlawfully processed money for Cuba, Iran, Sudan and Liberia.

It’s not expected that banks would be accused of trying to show support for countries like Cuba and Iran. It’s more likely that they would be accused of faulty oversight that made any unlawful transactions possible. The industry has maintained that such violations are almost always unintentional.

According to the Times, the Justice Department and the Manhattan district attorney’s office are also involved. The Manhattan US attorney’s office and the Manhattan district attorney’s office declined to comment.

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

Published on September 16, 2012
This article is closed for comments.
Please Email the Editor