Federal Reserve orders Citigroup to improve plan to prevent money laundering
NEW YORK The Federal Reserve announced Tuesday that last week, it ordered Citigroup (C) to improve its plans for preventing money laundering.
In an order dated March 21, the Fed said that Citi had agreed to fix "deficiencies" in its anti-money laundering controls. The bank has two months to submit a written plan addressing steps such as policies and funding for personnel.
- Citigroup to pay $730 million to settle lawsuit
- Banks too big to jail, fail or nail face new scrutiny
- Argentina: HSBC helped launder money, evade taxes
The order is based on similar mandates issued against Citi or its subsidiaries last year - one by the Office of the Comptroller of the Currency, and one by the Federal Deposit Insurance and the California Department of Financial Institutions.
Money laundering allows people to make money - often obtained illegally - appear like it came from another source. Banks are required to report suspicious activity to the government and to put in place rules meant to make money laundering impossible for customers.
Citigroup isn't accused of laundering money or of trying to support any clients who did. But it has been accused of having internal controls that were too lax to catch launderers. Other banks have faced similar accusations. Notably, the Justice Department last year said that British bank HSBC (HBC) had failed to flag money laundering that benefited Mexican drug traffickers, Iran, Libya and others under U.S. suspicion or sanction.
Citi said in a statement that it has already made "substantial progress" in strengthening its anti-laundering programs "in a comprehensive manner across products, business lines and geographies."
"Citi continues to take the appropriate steps to address remaining requirements and build a strong and sustainable program," the New York bank said.
Shares of the company added 13 cents to $44.63 in afternoon trading.