Exclusive: NY regulator probes European banks over Turkish family

Wed Sep 4, 2013 7:12pm EDT
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By Karen Freifeld

NEW YORK (Reuters) - New York's state banking regulator has ordered local branches of half a dozen European banks to turn over details of their transactions with a Jordanian bank, along with documents related to Turkey's Uzan family, the subject of a series of legal actions over their business dealings.

A person familiar with the situation said the order is part of an investigation by the state Department of Financial Services into whether the European banks are improperly doing business with the Uzans, once one of the richest families in Turkey.

It was the latest move by New York banking Superintendent Benjamin Lawsky to clamp down on questionable practices by foreign banks in New York. Last year, he reached a $340 million settlement with London-based Standard Chartered Plc (STAN.L: Quote) over transactions with Iran.

The six banks covered by the order are BNP Paribas SA (BNPP.PA: Quote), Commerzbank AG (CBKG.DE: Quote), Credit Agricole SA (CAGR.PA: Quote), Deutsche Bank AG (DBKGn.DE: Quote), Societe Generale (SOGN.PA: Quote), and Standard Chartered.

A spokeswoman for Standard Chartered said it was cooperating with the order, while representatives of the other European banks either declined to comment or did not respond to requests for comment.

The two-page order demanded details of any transactions the banks have had with Amman-based Jordan Dubai Islamic Bank JDIB.AM.

It also told the six banks to hand over copies of any documents they may have been asked to produce in a long-running court battle between Motorola Credit Corp and the Uzan family.

In that case, a federal judge in New York has found that the Uzans siphoned off some $2 billion in loans that Motorola Credit made more than a decade ago to Turkish mobile phone company Telsim, which the Uzans controlled at the time.   Continued...

The logo of Germany's Commerzbank is pictured behind a fountain in Frankfurt May 10, 2013. REUTERS/Lisi Niesner