Enforcement actions

Federal Reserve Bulletin, Summer, 2004

The Federal Reserve Board on May 10, 2004, announced the issuance of an order of assessment of a civil money penalty in the amount of $100 million against UBS, AG, Zurich, Switzerland, a foreign bank.

UBS, without admitting to any allegations, consented to the issuance of the order in connection with U.S. dollar banknote transactions with counterparties in jurisdictions subject to sanctions under U.S. law, specifically Cuba, Libya, Iran, and Yugoslavia.

The transactions were conducted through UBS's Extended Custodial Inventory (ECI) facility in Zurich, Switzerland, which was operated pursuant to a contract with the Federal Reserve Bank of New York. The Reserve Bank determined that certain former officers and employees of UBS engaged in intentional acts aimed at concealing the transactions and terminated the contract in October 2003.

ECIs are overseas cash depots, operated by banks on behalf of the Federal Reserve, to facilitate distribution and repatriation of U.S. currency.

The Board acknowledged the cooperation of the U.S. Department of the Treasury and its Office of Foreign Assets Control in the preparation of this order. The order is being issued in coordination with a separate action being taken by the Swiss Federal Banking Commission.

The Federal Reserve Board on June 17, 2004, announced the issuance of a final decision and order of prohibition against Stephanie Edmond, a former employee of First Tennessee Bank, N.A., Memphis, Tennessee, as well as Bank of America, N.A., Charlotte, North Carolina. The order, the result of an action brought by the Office of the Comptroller of the Currency, prohibits Ms. Edmond from participating in the conduct of the affairs of any financial institution or holding company.

Cease and Desist Orders

The Federal Reserve Board on May 10, 2004, announced the issuance of a cease and desist order against CAB Holding, LLC, Wilmington, Delaware, and Paul Shi H. Huang, the sole shareholder of CAB Holding, LLC.

The order addresses the violation of certain conditions imposed in writing on CAB Holding and Mr. Huang in connection with the acquisition of The Chinese American Bank, New York, New York.

The Federal Reserve Board on May 14, 2004, announced the issuance of a consent order to cease and desist against Riggs National Corporation, Washington, D.C., a bank holding company, and Riggs International Banking Corporation, Miami, Florida, an Edge corporation.

Riggs National Corporation and Riggs International Banking Corporation, without admitting to any allegations, consented to the issuance of the order in connection with deficiencies relating to the lack of oversight, internal controls, and procedures to ensure compliance with the Bank Secrecy Act.

In separate, coordinated actions, the Office of the Comptroller of the Currency and the Financial Crimes Enforcement Network announced the issuance of a consent order and the assessment of a civil money penalty against Riggs Bank, N.A., a subsidiary of Riggs National Corporation and the parent of Riggs International Banking Corporation. The order and penalty relate to violations of the Bank Secrecy Act.

The Federal Reserve Board on May 27, 2004, announced the issuance of a consent order to cease and desist and order of assessment of civil money penalty against Citigroup Inc., New York, New York, a bank holding company, and CitiFinancial Credit Company, Baltimore, Maryland, a nonbank subsidiary of Citigroup.

The order assesses a civil money penalty against CitiFinancial and requires CitiFinancial to pay restitution to certain subprime personal and home mortgage borrowers. The civil money penalty is $70 million, subject to a partial credit for restitution. The order also requires Citigroup and CitiFinancial to take steps to maintain and enhance compliance with consumer protection laws.

Citigroup and CitiFinancial, without admitting any allegations, consented to the issuance of the order in connection with CitiFinancial's lending activities and its conduct during an examination by the Federal Reserve Bank of New York.

Written Agreements

The Federal Reserve Board on April 30, 2004, announced the execution of a written agreement by and among Cache Valley Banking Company, Logan, Utah; the Cache Valley Bank, Logan, Utah; the Utah State Department of Financial Institutions, Salt Lake City, Utah; and the Federal Reserve Bank of San Francisco.

The Federal Reserve Board on May 14, 2004, announced the execution of a written agreement by and among Putnam-Greene Financial Corporation, Eatonton, Georgia; The Citizens Bank of Cochran, Cochran, Georgia; the Banking Commissioner of the State of Georgia, Atlanta, Georgia; and the Federal Reserve Bank of Atlanta.

The Federal Reserve Board on June 1, 2004, announced the execution of a written agreement by and between CIB Marine Bancshares, Inc., Pewaukee, Wisconsin, and the Federal Reserve Bank of Chicago.

The Federal Reserve Board on June 3, 2004, announced the execution of a written agreement by and among Utah Bancshares, Ephraim, Utah; the Bank of Ephraim, Ephraim, Utah; the Utah State Department of Financial Institutions, Salt Lake City, Utah; and the Federal Reserve Bank of San Francisco.