N.Y. Regulator Pushes BNP Paribas to Remove Senior Adviser
Justice Department Hoping for Over $10 Billion Settlement for Violating Sanctions
New York's top financial regulator has asked BNP Paribas SA BNP.FR -1.55% to oust a senior adviser at the French bank as part of a proposed settlement of BNP's alleged violations of U.S. sanctions, according to a person familiar with the matter.
Benjamin M. Lawsky, who runs New York's Department of Financial Services, is pushing the bank to remove Vivien Levy-Garboua, this person said. Mr. Levy-Garboua has served as head of compliance and internal controls for BNP in North America and currently acts as an adviser to senior bank officials.
Mr. Levy-Garboua, who joined a BNP predecessor in 1980 and is believed to be in his mid-60s, was in charge of compliance in North America from 2005 to 2008, a period during which BNP allegedly conducted transactions with Sudan, Iran and other countries subject to U.S. sanctions. Those transactions are now under investigation by New York and U.S. authorities.
The U.S. Justice Department is pushing BNP to pay more than $10 billion and plead guilty to settle the probe, according to people familiar with the negotiations. BNP has said it is cooperating with the investigations.
Mr. Lawsky's office has told BNP representatives that it wants the bank to remove at least a dozen executives, according to people familiar with the matter. In addition to Mr. Levy-Garboua, the New York regulator also has asked BNP to let go George Chodron de Courcel, a chief operating officer of the bank, people familiar with the negotiations said last week. Mr. Chodron de Courcel, 64, already was planning to retire from the bank, one of these people said.
Mr. Lawsky's office has a key role in the wide-reaching probe of BNP because his office oversees BNP's New York branch, which handled transactions under investigation. Mr. Lawsky's office provides BNP with a license to operate in the state.
Mr. Lawsky also wants to suspend BNP's ability to transfer money through its New York branch — which it does for clients in a business known as dollar-clearing — as part of a settlement. BNP is staunchly resisting this punishment, which executives fear could hurt the bank's operations with clients that want to transact in U.S. dollars, according to people close to the bank.
Inside BNP, the prospect of huge penalties has fanned tensions among executives, who have debated whether Chairman Baudouin Prot should step down, people familiar with the matter said last week. Mr. Prot hasn't commented.