CORRECTED-Taiwan's Mega Financial says U.S. regulators found lapses at second branch

Sat Oct 1, 2016 5:14am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

(Corrects to say Chicago branch manager replaced voluntarily, not at request of U.S. regulators)

TAIPEI, Sept 30 (Reuters) - A U.S. state regulator has found the Chicago banking branch of Taiwan's Mega Financial Holding Co has not met required compliance controls, the president of the Taiwanese financial firm told Reuters on Friday.

It is the second bank branch of the state-controlled firm to run afoul of U.S. financial authorities, after its New York branch was fined $180 million for lax compliance and anti-money laundering violations in August.

Mega Financial, which has close ties to Taiwan's government, has been under scrutiny since about 200 of its customers were named in the so-called Panama Papers, a massive leak of documents from a Panamanian law firm that put the spotlight on the shadowy world of offshore companies used to avoid tax.

President Bruce L.Y. Yang said financial regulators had uncovered problems with internal controls at the Chicago branch of Mega International Commercial Bank, known as Mega Bank.

"The Chicago branch has to improve some deficiencies in regulatory compliance," Yang said. He added that the branch manager had been replaced, but it was unclear if the bank would face a fine.

Mega Bank said in a statement on Saturday that local regulators found deficiencies at the Chicago branch during a regular annual inspection at the start of this year.

Mega Bank head office determined there were problems with procedures and internal controls at the branch and voluntarily replaced the Chicago branch manager in June, while urging the branch to make improvements, the statement said.

The manager was not replaced at the request of the U.S. regulators, it said.   Continued...