Exclusive: NY regulator presses European banks about hidden assets

Sat Oct 12, 2013 2:26am EDT
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By Karen Freifeld

NEW YORK (Reuters) - New York's state banking regulator has stepped up pressure on four European banks, ordering them to hand over details of their transactions with a Jordanian bank and documents related to Turkey's Uzan family, which owes billions of dollars to Motorola Credit Corp.

In an order issued Thursday, the state Department of Financial Services told New York branches of the banks they must submit a reasonable timetable for compliance by October 18.

The four banks are BNP Paribas SA (BNPP.PA: Quote), Credit Agricole SA (CAGR.PA: Quote), Societe Generale (SOGN.PA: Quote) and Standard Chartered Plc (STAN.L: Quote).

New York Banking Superintendent Benjamin Lawsky has been clamping down on foreign banks with New York branches. Last year, the regulator reached a $340 million settlement with Standard Chartered over transactions with Iran.

The latest action stems from a long-running federal case between Motorola Credit Corp and members of the Uzan family, whose business dealings are the subject of legal actions around the world. In the Motorola case, a federal judge in New York has found that the Uzans siphoned off some $2 billion that Motorola loaned to Turkish mobile phone company Telsim, which the Uzans controlled at the time.

The judge, U.S. District Judge Jed Rakoff, said in August that the Uzans have hidden their assets to prevent Motorola from collecting billions of dollars in damages.

Rakoff also determined the Amman-based Jordan Dubai Islamic Bank JDIB.AM is a proxy for the Uzans.

On August 7, the New York banking regulator ordered six banks to hand over details of their transactions with Jordanian bank and any documents relating to the federal court case.   Continued...

French BNP Paribas bank logo is seen at their presentation of their 2010 annual results in Paris February 17, 2011. REUTERS/Charles Platiau