Home » News » Justice

BNP Paribas executive asked to leave amid probe

First Published      Last Updated Jun 05 2014 04:43 pm

Under pressure from U.S. authorities, the giant French bank BNP Paribas is considering cutting ties to one of its most senior executives, a rare concession that points to the severity of an investigation into the bank's dealings with Sudan and Iran.

The executive, one of BNP's three chief operating officers, would step down or retire as part of the bank's settlement with New York state's financial regulator, according to people briefed on the matter. The regulator, along with federal and state prosecutors, is investigating whether BNP improperly processed transactions through its New York branches on behalf of countries like Sudan that have been subject to U.S. sanctions.

The chief operating officer, Georges Chodron de Courcel, is expected to be one of several BNP employees to depart over the investigation, according to the people briefed on the matter who spoke on the condition of anonymity. The bank and the New York state regulator, Benjamin M. Lawsky, are also discussing the possibility that at least one other senior executive could step down in addition to at least a dozen more employees.

Chodron de Courcel has not been accused of any wrongdoing. It is possible, one person said, that his departure was already planned as part of his retirement.

It is unusual for a big global bank to agree to executive departures. In the case of Credit Suisse, for example, no senior executives resigned even though the bank pleaded guilty to helping U.S. account holders hide wealth overseas.

Lawsky and BNP, France's biggest bank, are still negotiating the terms of the deal, the people said. A final decision about which executives might depart could still change.

The forced departures are one element of the broader settlements the bank is negotiating with the U.S. authorities. Federal and state prosecutors - Preet Bharara, the U.S. attorney in Manhattan; Cyrus Vance Jr., the Manhattan district attorney; and Leslie Caldwell, the head of the Justice Department's criminal division in Washington - are pushing the bank to plead guilty to criminal wrongdoing.

To resolve all of the investigations, the people said, BNP is expected to pay at least $8 billion. The penalty, a possible record for a criminal investigation into a big global bank, has prompted alarm at the bank and among French officials, who warn that paying such a huge sum could erode the bank's capital levels and stir further unrest in the European financial system.