US Wants BNP Paribas to Pay Over $3.5B and Plead Guilty to Criminal Charges

Authorities in the United States want BNP Paribas SA (BNP) to pay over $3.5 billion to settle state and federal probes into the lender’s involvement with countries that are sanctioned, including Iran and Sudan. Prosecutors reportedly would like BNP to plead guilty to criminal charges related to the alleged misconduct. The government’s push for a guilty plea is definitely a shift from previous sanction cases that were usually resolved with a deferred prosecution deal.

The US Justice Department, US Treasury Department, the U.S. Attorney’s office in Manhattan, the New York Department of Financial Services, and the Manhattan District Attorney’s office are the ones who conducted the investigations against BNP Paribas. According to Reuters, last week the bank’s CEO Jean-Laurent Bonnafe and its lawyers met with the New York Department of Financial Services to ask for leniency. A source told the wire service that the state’s banking regulator doesn’t plan to take away BNP Parabas’s license as longa as any deal reached includes certain stiff penalties, such as the temporary suspension of dollar clearing through New York.

US authorities have pursued several foreign banks because they violated sanctions on Iran and other nations. The government believes that these banks did business with entities with ties to these countries, perhaps even stripping information that came from wire transfers so they could get through the US financial system without raising concerns.

One of those to settle was Standard Chartered (STAN.L) in 2012. The bank consented to pay $327 million to settle allegations that it violated sanctions against Sudan, Libya, Iran, and Burma. Standard Chartered also paid $340 million to New York’s regulator over the Iran sanctions.

In December, Royal Bank of Scotland Group Plc (RBS) agreed to pay $100 million to resolve allegations that it violated sanctions involving Sudan, Iran, Cuba, and Burma. According to New York’s banking regulator, from 2002 to 2011, RBS concealed or did not reveal data about the identities of sanctioned parties in 3,500 transactions valued at about $523 million. Also reaching settlements were HSBC Holdings Plc (HSBA), Mitsubishi UFJ Financial Group Inc. (MTU), and ING Bank NV (NV).

The SSEK Partners Group is a securities law firm that represents high net worth individuals and institutional investors.

BNP Paribas may pay more than $3 billion to end probes: sources, Reuters, May 13, 2014

U.S. Seeking More Than $3.5 Billion From BNP Paribas, Bloomberg, May 13, 2014

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