The consulting and accounting giant Deloitte received a sharp slap on the wrists from officials in New York state yesterday, with one of its arms agreeing to pay a $10m fine and accepting a one-year ban from providing consulting work to financial institutions overseen by state regulators after its work for Standard Chartered on money-laundering issues was found wanting.
New York state's Department of Financial Services (NYDFS) said it had reached the agreement with Deloitte Financial Advisory Services (DFAS), which is part of Deliotte's operations in the US, over its "misconduct, violations of law, and law of autonomy during its consulting work" for the British bank.
The work concerned money-laundering issues, and the settlement comes after Standard Chartered last year agreed to pay out hundreds of millions of dollars in fines to authorities in the US over dealings with Iran.
DFAS accounts for around $500m of the revenues of the broader Deloitte US business, which has annual revenues of around $12bn.
The agreement between DFAS and the regulator states that the division "will not accept any new engagements that would require" officials to approve it as an independent consultant or to authorise the disclosure of confidential information under certain provisions of New York state's banking laws. As part of the deal, the DFAS will also implement certain reforms.
"At times, the consulting industry has been infected by an 'I'll scratch your back if you scratch mine' culture and a stunning lack of independence," Benjamin Lawsky, the Superintendent of Financial Services in New York state, said.
Deloitte, in its statement, said: "We are pleased that, as the agreement states, a thorough investigation by [NYDFS] found no evidence that Deloitte FAS knew of, or aided, abetted or concealed any alleged violation of law by [Standard Chartered Bank]."