BNP to Pay Up to $9 Billion, Plead Guilty to End Probe, WSJ Says

Jun 22, 2014 9:27 pm ET

June 23 (Bloomberg) -- BNP Paribas SA will pay $8 billion to $9 billion, plead guilty and accept other sanctions under broad terms of a settlement with U.S. authorities over claims it hid transactions that violated U.S. sanctions, the Wall Street Journal reported, citing unidentified people close to the probe.

The bank would be temporarily banned from handling transactions in U.S. dollars, probably for a matter of months, and would announce departures of more than 30 employees, many of whom already have left, the newspaper said. BNP Paribas will probably plead guilty in early July to a criminal charge of conspiring to violate the International Emergency Economic Powers Act, the Journal said.

The penalty would make BNP Paribas the second major European bank to plead guilty in the U.S. this year. In May, Credit Suisse Group AG agreed to pay $2.6 billion, the largest penalty in an offshore tax case, after using secret Swiss accounts to help Americans hide money from the Internal Revenue Service, and its main banking unit pleaded guilty to a criminal charge.

U.S. investigators have at times sought at least $10 billion to resolve the investigation of BNP Paribas, people familiar with the discussions have said.

Investigators found evidence that the Paris-based bank intentionally hid $30 billion of dealings that violated U.S. sanctions, the Wall Street Journal reported. Precise settlement terms haven’t been reached, and the timing of a final agreement could change, the newspaper said.

HSBC Sanction

U.S. authorities first learned about possible wrongdoing by BNP Paribas around 2007, when an informant contacted the Manhattan District Attorney’s office. The bank conducted its own investigation and about a year later came forward with its own findings, people familiar with the matter have said.

HSBC Holdings Plc agreed to pay $1.9 billion in 2012 to resolve a sanctions-violation investigation, while it avoided a guilty plea by admitting wrongdoing as part of its accord.

That had been the largest settlement for doing business with sanctioned countries. U.S. prosecutors argued that a more severe penalty against BNP Paribas was justified because the misconduct was more egregious and the bank didn’t fully cooperate with the investigation, a person with knowledge of the matter has said.