The Portuguese bank that sent markets reeling Thursday morning ran afoul of U.S. authorities as early as 2012, according to Federal Reserve documents.
The Fed issued a cease-and-desist order and a $975,000 fine to Banco Espirito Santo for operations that the bank ran out of a subsidiary in Newark, New Jersey. The Fed said the bank had violated an international banking agreement by "operating representative offices" without approval from the Board of Governors. The subsidiary served many Portuguese immigrants.
U.S. stocks dropped sharply on Thursday, but recouped much of the losses, which came in the first hour of trading, as investors reassessed trouble at Espirito Santo and its potential impact on the health of Europe's recovery. Fears spread that other banks in Portugal would sell off and potentially reignite Europe's debt woes.
There are no indications that a chartered bank division under the same name in Florida, which is monitored by the FDIC, had connections to the Portuguese company.
—By CNBC.com staff