NY Regulator Hits PwC For Improperly Changing AML Report On Japanese Bank

Tom Burroughes

19 August 2014

US regulators have fined about these special instructions at the initial phase of the HTR then we would have used a different approach in completing this project’. Specifically, PwC would have conducted a more in-depth, forensic investigation into the bank's scheme – rather than simply a more rote, mechanical review of the transactions provided to it by the bank. In other words, the discovery of the Bank's scheme to falsify wire transfer information cast doubts on whether PwC had a complete set of data to review (among other issues),” the statement said.

“However, at the bank’s request, PwC ultimately removed the original warning language from the final HTR Report the bank submitted to regulators and, in fact, inserted a passage stating the exact opposite conclusion,” it said. The passage read: "e have concluded that the written instructions would not have impacted the completeness of the data available for the HTR and our methodology to process and search the HTR data was appropriate".

The PwC report also deleted information such as the English translation of BTMU’s wire-stripping instructions, which referenced the bank doing business with "enemy countries" of the US; it deleting a regulatory term of art that PwC used throughout the report in describing BTMU’s wire-stripping instructions and replaced it with a nondescript reference that lacked regulatory significance.

Director

Referring to a director that, it said, was involved in the report, the regulator said that on “numerous occasions, this director made statements in emails to PwC partners and employees that elevated his apparent concern for client satisfaction over the need for objective inquiry”.

“No-one at PwC reprimanded or even told the director that his comments were inappropriate because they drew the firm’s objectivity seriously into question,” the regulator said.

Bank of Tokyo-Mitsubishi UFJ, part of Mitsubishi UFJ Financial Group, reached a settlement with Lawsky’s department in 2013 and agreed to pay $250 million for violations of US sanctions laws, according to Bloomberg.