U.S. financial authorities will likely take disciplinary action against Japan's Mitsubishi UFJ Financial Group for slack monitoring of suspected money laundering, a source close to the matter said Wednesday.
The punishment will likely be handed out to Japan's biggest bank some time this month, the source said.
The Nihon Keizai business daily said on Wednesday the Federal Reserve Board and other authorities believe MUFG was lax in reporting suspicious money transfers and account openings at the New York branch of the Bank of Tokyo-Mitsubishi UFJ and at the Bank of Tokyo-Mitsubishi UFJ Trust Co., also based in New York.
A spokesman for the financial group declined to comment.
The branch and trust unit will likely be slapped with a business improvement order and fines, as well as forced to submit fund transfer records for the past few years, but operations will not be suspended, the newspaper said.
U.S. officials have recently visited Japan and held discussions with MUFG about the terms of its punishment. If MUFG signs an agreement, the disciplinary actions could be announced as early as this month, the newspaper said.
The business improvement order will require them to overhaul their internal control structure, the Nihon Keizai added.
The sanctions will also likely force MUFG to put a halt on plans for acquisitions and the establishment of a holding company structure as both require the approval of U.S. authorities, the newspaper said.