Federal and state officials may deploy the guillotine in prosecuting French banking giant BNP Paribas.
Prosecutors are looking to suspend the lender from US dollar clearing, which would effectively kill BNP’s ability to do business in assets that are denominated in dollars, according to a person familiar with the negotiations.
The prosecution — led by US Attorney Preet Bharara, the Justice Department’s criminal division and the Manhattan district attorney Cyrus Vance Jr., — met with Benjamin Lawsky, New York’s chief financial regulator, to weigh whether to force BNP to plead guilty to criminal charges that the lender did business with blacklisted countries, including Iran, Cuba and Sudan, according to a source.
Other less draconian penalties include firing the employees involved.
Negotiations are still ongoing and haven’t been settled, a source said.
Clearing “is the activity that takes place from the time of the transaction until it’s settled,” said Michael Woolfolk, a strategist at Bank of New York Mellon in New York. “It’s very important for an international bank.”
Investigators are also looking into Credit Suisse illegally providing tax shelters, the person said.
US Attorney General Eric Holder said last year that charging banks with a crime could endanger the international banking system because they’re so large and interconnected.
A guilty plea could stop other financial institutions from working with them.
Cesaltine Gregorio, a spokeswoman for BNP Paribas, and Jack Grone of Credit Suisse, declined to comment.