Tuesday, March 10, 2015


Though the settlement has not yet been finalized, there are reports that New York DFS regulators are insisting that a number of senior Commerzbank AG executives resign, in connection with alleged massive money laundering and sanctions violations committed by the bank. A figure of $1.4bn has been mentioned as the possible civil penalty that will be levied, but as of March 10, no confirmation of this figure has surfaced.

Anti-money laundering commentators have, for years, stated that only with the termination of those bank executives who condone AML/CFT & sanctions violations, can an effective culture of compliance ever be universally adopted by commercial banks. If the executives who overrule compliance officers on AML and sanctions matters are publicly terminated, and thereby made so radioactive that they cannot lateral over to another bank, then there may be sufficient deterrence established, to compel all banks to toe the line on compliance.

Perhaps the Commerzbank case will be the first of a chain of cases where bank executives are held personally accountable for letting profits trump compliance. We shall see.

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