BNP Paribas has agreed a settlement with US prosecutors following allegations of sanctions violations.
France's largest bank has agreed to pay $9 billion (£5.1 billion) to the US in what is the largest fine handed to a European bank by the North American country in history. According to figures from the Department of Justice and Securities & Exchange Commission, BNP Paribas' exceeds the $2.6 billion fine handed to Credit Suisse for tax evasion and the $1.9 billion given to HSBC for money laundering.
As part of the settlement the bank will plead guilty to breaking US sanctions against trade with Sudan, Iran and Cuba. It will also be restricted from carrying out certain transactions in US dollars for one year from the beginning of 2015. The US wants the settlement to act as a warning to other firms that any illegal activity while working with the country would not be tolerated.
Speaking at a press conference, US attorney general Eric Holder said: "Between 2004 and 2012, BNP engaged in a complex and pervasive scheme to illegally move billions through the US financial system."
BNP had been bracing itself for a substantial fine with boss Jean-Laurent Bonnafe stating in an internal memo on Sunday (June 29th) that the bank would be "punished severely". However, the head of BNP did see some positives in the transaction.
Mr Bonnafe said: "This is good news for all staff and for our clients. It will enable us to remove the current uncertainties that are weighing on our group. We will be able to put behind us these problems, which belong to the past."
However, France's foreign minister Laurent Fabius was less positive and described the size of the fine as being "not reasonable". He added that it would suggest that there is "an extremely serious problem" within the European banking sector.
Find up to date information on spread betting strategies at City Index
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.