The New York State Attorney General’s Office is investigating suspicions of money laundering at Israel Discount Bank of New York.
Israel Discount Bank (TASE: DSCT) reported today, “The New York State Attorney General is conducting an investigation into a number of financial institutions, including Discount Bank New York, on matters relating to the transfer of funds from a third country, and the bank’s conduct in matters relating to debts stemming from the laws against money laundering. The New York State Department of Banking is also making inquiries.” Discount Bank declined to make any further comment.
Discount Bank added that it was currently negotiating with the New York State Attorney General to end the investigation with a non-criminal settlement. The prospective settlement will include payment of a fine, and a commitment to take action to improve its procedures, and correct faults that had come to light.
At the same time, Discount Bank reports that it had deviated from the permitted 32% exposure in respect of its overseas branches. The bank’s exposure currently stands at 38.4%, compared with 34.5% in late 2004.
The Bank of Israel Banking Supervision Department is demanding that Discount Bank take steps to reduce this deviation. The bank wrote to the Supervisor of Banks, asking him to raise the permitted level of exposure to 35%, which Discount Bank is also exceeding at the moment.
Published by Globes [online] - www.globes.co.il - on November 30, 2005