On July 16, the NYDFS entered a consent order finding that a global banking and financial services institution, headquartered in Sweden, and its New York branch violated New York Banking Law § 125(3) by allegedly failing to produce information responsive to multiple special report requests the NYDFS issued under Banking Law § 37. NYDFS noted that the investigation stemmed from the 2016 leak of roughly 11.5 million records from a Panama-based law firm, which exposed alleged hidden financial dealings by politicians, public officials, and offshore companies and referenced the bank along with other institutions.

NYDFS found that the bank’s New York branch responded to the department’s initial 2016 request as though it covered only the branch, denying any responsive connections, even though the bank’s home office was purportedly aware of connections between Baltic subsidiary customers and the law firm and of related regulatory inquiries in Sweden and Estonia. NYDFS further found that, when it issued a follow-up request in 2018, the bank’s outside counsel represented that the search would cover global operations, but the bank allegedly excluded its Baltic subsidiaries without informing NYDFS, despite internal communications the department says show bank personnel understood the request’s scope and had already found matches connecting the subsidiaries to the law firm; NYDFS said it did not receive substantive Baltic-subsidiary documents until March 2019, after learning through media reports that the bank had allegedly withheld the information.

Under the consent order, the bank and its New York branch agreed to pay a $50 million civil monetary penalty to NYDFS within 10 days, pursuant to Banking Law §§ 39 and 44, without claiming a tax deduction or credit or seeking reimbursement or indemnification, including through insurance. The bank and its New York branch also committed to fully cooperate with NYDFS, and NYDFS agreed to take no further action for the conduct described in the order provided they comply with its terms, while reserving the right to pursue action for any transactions or conduct not disclosed to NYDFS in connection with the matter.