A fine of $2.4 million for unauthorized use and disclosure of confidential supervisory information (CSI) was levied against a Chinese bank and its New York branch by the Federal Reserve, the agency said Friday.
The New York state banking regulator has also fined the bank, to the tune of $30 million, the Fed noted.
In a release, the agency said the fine – and enforcement action – was issued against the Industrial and Commercial Bank of China Ltd. and its New York branch. The Fed said CSI includes reports of bank examinations and other confidential communications by banking regulators. The agency noted that “it is illegal to disclose confidential supervisory information without prior approval of the appropriate banking regulator.”
In its filing, the Fed said that the New York branch of the bank “lacked any formal policies, procedures, training, or other internal controls designed to instruct employees regarding how to properly handle CSI or how to prevent the unauthorized dissemination and use of CSI.”
The Fed alleged that, after the bank received confirmation from the Fed that proposed communications from the bank with a third party included CSI and would therefore require a waiver from the Fed prior to disclosure, the bank and its branch caused the unauthorized, impermissible, disclosure of CSI to occur anyway.
“The branch’s lack of adequate internal controls related to the use and dissemination of CSI caused the Bank and the Branch to make the foregoing unauthorized disclosure of CSI,” the Fed said.
The state fine was levied by the New York Department of Financial Services, the supervisor of the bank’s New York branch.