A senior BNP Paribas SA (ADR) (OTCMKTS:BNPQY) (EPA:BNP) manager may resign from his post as part of a negotiated settlement with US authorities, the New York Times is reporting.


Engineering money transfers to Sudan, Iran

France’s largest bank is accused of engineering money transfers into Sudan and Iran, nations on the US list of banned nations.  France has no such ban and the bank was reported to have received a legal opinion that conducting business with Sudan and Iran might be acceptable so long as it was conducted outside US legal jurisdiction, as previously reported.

The bank is currently in negotiations with Benjamin M. Lawsky, the New York State bank regulator. As well, other government officials are involved pushing for an admission of criminal wrongdoing including Preet Bharara, the US District Attorney from Manhattan; Cyrus Vance Jr., the Manhattan district attorney; and Leslie Caldwell, head of the Justice Department’s criminal division.  To resolve the issue the bank might be required to pay $8 billion in fines and sever ties with one or more of the individuals responsible for the issue, the report said. Hotly debated is the potential loss of BNP’s ability to process foreign client transfers out of its New York operations, which the bank says could cripple its competitiveness.

Obama won’t get involved in investigation

The Times is reporting that US President Obama, meeting with the French President tonight in Paris, will not “meddle in prosecutions,” as he describes it. “The tradition of the United States is that the president does not meddle in prosecutions,” Obama was quoted as saying.  The French government and BNP have said that the severity of the fine could cripple its economic stability.

Chief operating officer may step down

The senior executive targeted by authorities is Chodron de Courcel, one of three chief operating officers.  The report indicated that other individuals could find an early retirement package in the offing.

There will be no individual prosecution in the case because during its initial internal investigation, BNP was reported to have “dragged their feet” and the five year statute of limitations has expired, according to the report.

From 2002 to 2009 BNP is accused of processing transactions with banned countries and, according to sources quoted in the Times report, when transaction paper work processed by non-US employees reached the New York office, information tying payments to US entities was deleted, concealing those persons and entities who transferred assets in violation of US rules.