BNP Paribas SA
) will likely pay nearly $3.5 billion to the U.S. regulators to
resolve investigations into the money laundering issues raised
against it. This information was disclosed by the persons familiar
with the case.
BNP Paribas' dealings with sanctioned countries including Sudan,
Iran and Cuba are under probe. The agencies involved in the
investigations are the Federal Bureau of Investigation, offices of
Manhattan U.S. Attorney and Manhattan District Attorney, the
Justice Department's criminal division in Washington, and New
York's Department of Financial Services.
Notably, the negotiations for settlement are still at a nascent
stage and the actual amount to be paid by BNP Paribas has not been
finalized. The deal could possibly be reached as early as next
month. Further, the law enforcement agencies are also expected to
seek a guilty plea from BNP Paribas.
Additionally, the regulators are considering the filing of a
criminal charge against BNP Paribas on the ground that the bank did
not fully co-operate during the investigation period. Also, they
allege that the company continued with its dealings with the
sanctioned countries even after being asked to stop the same.
BNP Paribas is not the only foreign bank to be prosecuted on money
laundering charges. Already, the U.S. subsidiaries of 9 global
banks including those of
HSBC Holdings plc
ING Groep NV
) have reached settlements with the law enforcement agencies over
Nevertheless, in terms of fine, BNP Paribas' penalty (though not
final) is likely to be the highest. Till now, HSBC has paid the
biggest fine of roughly $1.9 billion to resolve money laundering
charges in 2012.
For BNP Paribas, the magnitude of penalty could significantly hurt
its performance. Though the company is one of the stronger European
banks, the present overall macroeconomic scenario coupled with the
above-mentioned fine could weigh on the bottom line.
Currently, BNP Paribas carries a Zacks Rank #4 (Sell).
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