Thu, Jan 30, 2014

http://blogs.wsj.com/riskandcompliance/2014/01/29/sdny-plans-unit-name-change-amid-money-laundering-focus/

By RACHEL LOUISE ENSIGN

Wall Street Journal

The powerful Manhattan U.S. attorney’s office plans to add “money laundering” to the name of its criminal division’s asset forfeiture unit, in the latest sign of its focus on the area.

This move, mentioned by U.S. Attorney  at a conference Monday, comes on the heels of his office’s $1.7 billion settlement with J. P. Morgan ChaseJPM +0.68% & Co. announced this month over anti-money laundering lapses.

“J.P. Morgan is not going to be the last big case that my office brings in this area. I can promise that,” he said at an Association of Certified Anti-Money Laundering Specialists event in New York.

Mr. Bharara went on the defensive against critics of deferred prosecution agreements like the one employed in the recent J.P. Morgan settlement. These critics often maintain that individuals, not just companies, should be prosecuted in these situations.

“It should not be one or the other; individuals or institutions,” Mr. Bharara said. “Institutional accountability is particularly appropriate in the [Bank Secrecy Act] context because many of the anti-money laundering laws and BSA provisions are specifically directed at institutions.”

But Benjamin M. Lawsky, head of the New York State Department of Financial Services, took a different stance in a speech at the same event, calling for more actions against individuals in order to close what he called an “accountability gap” at financial institutions. He advocated for regulators to play a greater role in those actions against individuals. “Real deterrence, in my opinion this is the key, it means that as regulators and as prosecutors, we should be focusing a lot of individual bad conduct, not just corporate wrongdoing,” he said. “If as we resolve cases as both regulators and prosecutors we can’t find individuals to hold accountable…we’re not really creating real deterrence.”