Bank of New York gets “warning” from the Feds
The Federal Reserve has issued a warning to the Bank of New York, questioning the control of its operating, specifically as the result of the RW Professional money laundering that resulted in its paying $38 million in criminal penalties. The bank was given 60 days this time to review its compliance with regulations, submit a plan for strengthening its controls against money laundering and take other steps. In a statement Monday, the bank said it had already completed some of the mandated actions and that others were under way. "We plan to fulfill the expectations of the agreement in a timely manner," said Thomas Renyi, the bank's chairman and chief executive. The Bank of New York agreed to pay $250,000 to settle a civil lawsuit by the Securities and Exchange Commission accusing the bank of failing, as a transfer agent for stocks and bonds of various companies, "to exercise reasonable care" to locate owners of the securities who were deemed "lost." According to statements to the press, The Bank of New York neither admitted nor denied the allegations in the SEC's suit filed in federal court in Manhattan, where the bank is based, but did agree to refrain from future violations of securities laws. The bank also agreed to repay the affected holders of the stocks and bonds. Between January 1998 and September 2004, some $11.5 million in assets belonging to 14,159 securities holders were turned over to states as unclaimed property as a result of the bank's failure to find them, the SEC said. Last November, the bank agreed to pay $38 million in penalties and undertake reforms to end a long-running criminal investigation by federal authorities into fraud and money laundering. The bank admitted criminal conduct, and agreed to forfeit $26 million to the government and $12 million to victims in exchange for avoiding criminal prosecution. February 17, 2006, Barry Drayer, 66, of Wellesley, Massachusetts, Vice-President of RW Professional, who claimed he was "just a salesman," was been found guilty as well as Stephen Barker, 42, of Lake Forest, California. Several other officers also pleaded guilty and submitted state evidence. Barry Drayer never took the witness stand. Sentencing is expected in June, 2006. April 20, 2006, the Bank of New York Company, Inc. reported first quarter net income of $422 million compared with $379 million in the year-ago quarter and diluted earnings per share of 55 cents, up 12% over the 49 cents earned in the first quarter of 2005. In the fourth quarter of 2005, earnings were $405 million and 53 cents. Copy of Federal Reserve “admonishment:” http://leasingnews.org/PDF/Fed_reserve.pdf Bank of New York 1st Quarter report: http://leasingnews.org/PDF/Bank_of_NY.pdf RW Professional stories: http://www.leasingnews.org/Conscious-Top%20Stories/RW_stories.htm |
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