TAIPEI, Taiwan (AP) — Taiwan's financial regulator is investigating Mega Financial Holding Co. after New York state ordered its banking unit to pay a $180 million penalty and install an independent monitor for violating the state's laws against money laundering.
The investigation comes as regulators across the globe step up financial scrutiny following the leak of a trove of data about offshore accounts set up by a Panamanian law firm.
Taiwan's Financial Supervisory Commission said in a statement seen Tuesday that it was looking over records at the bank, and investigating possible violations.
New York's Department of Financial Services announced the fine for Mega International Commercial Bank last Friday. It ordered the bank to beef up compliance after finding its staff, unfamiliar with U.S. regulations, failed to conduct reviews meant to detect suspicious transactions.
U.S. regulators expressed strong concern given that Mega International has two branches in Panama, which they described in a consent order as a "high-risk area" for money laundering.
They did not say if the bank had been implicated in money laundering but chastised it for failing to report "fraud, dishonesty, making of false entries and omission of true entries and other misconduct."
The government-appointed chairman of Mega Financial Holding, Chen Sung-hsin, told reporters in Taiwan that the bank was not engaged in money laundering, but had failed to keep up with regulatory requirements.
"The regulations are much tighter than in the past and we could not manage to meet them," he said.
Concern over offshore companies intensified after the Washington-based International Consortium of Investigative Journalists published a slew of stories based on the leak of documents belonging to Panamanian law firm Mossack Fonseca. The reports detailed how world leaders, celebrities and businesses were using offshore companies to hide money.