Citibank has retained Ernst & Young to supervise a regulator-mandated review of the bank’s transactions that will seek to determine the degree to which alleged compliance failures allowed drug traffickers or other criminals to launder money, sources familiar with the arrangement said.
The results of this high-stakes process will likely play a key role in determining the size of any fine the regulator ultimately levies against the South Dakota-based bank, the sources said.Last week, the Office of the Comptroller of the Currency made public a cease-and-desist order against Citibank as part of a settlement agreement with the firm. The order, which was dated April 5, charged that an examination had revealed that the bank failed to comply with Bank Secrecy Act regulations that required it to detect and report to authorities suspicious transactions.
In addition to requiring Citibank to bolster its anti-money laundering (AML) compliance program, the order gave the bank 30 days to hire “one or more independent consultants” to “supervise and certify” a review of its historical transactions, a process commonly known as a “look-back.” The purpose of a look-back is to determine the scope of the suspicious transactions that flowed through a financial institution with purported AML weaknesses.
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