AmSouth [REGIONS FINANCIAL CORPORATION] Fined for Shoddy Oversight
Source: TheStreet.com - 10/12/2004 5:11 PM By Matthew Goldstein, Senior Writer
Southeastern regional bank AmSouth [REGIONS FINANCIAL CORPORATION] (RF:NYSE - commentary - research) is paying $50 million in fines to settle a federal
investigation stemming from allegations it failed to properly report "suspicious activities'' of some of its customers.
The Alabama-based bank, in the deal, is paying a $40 million fine to federal prosecutors and a $10 million fine to the Federal
Reserve. AmSouth [REGIONS FINANCIAL CORPORATION] said the settlement will result in a $4 million pretax charge against third-quarter earnings.
In accepting the settlement, the U.S. Attorney's Office for the Southern District of Mississippi has agreed to take no further
action against the bank, as long as AmSouth [REGIONS FINANCIAL CORPORATION] takes a series of steps to enhance its compliance procedures.
The deal stems from an investigation into allegations involving two AmSouth [REGIONS FINANCIAL CORPORATION] customers and a scheme involving fraudulent notes
that were placed into a custodial account at the bank. The scheme triggered a number of civil lawsuits from individuals and
institutions allegedly defrauded by the AmSouth [REGIONS FINANCIAL CORPORATION] customers.
The federal investigation subsequently expanded to examine AmSouth's [REGIONS FINANCIAL CORPORATION] general procedures for policing its customers and spotting
suspicious activities.
|
