AmSouth Fined for Shoddy Oversight
Source: TheStreet.com - 10/12/2004 5:11 PM By Matthew Goldstein, Senior Writer
Southeastern regional bank AmSouth (ASO:NYSE - commentary - research) is paying $50 million in fines to settle a federal
investigation stemming from allegations it failed to properly report "suspicious activities'' of some of its customers.
The Alabama-based bank, in the deal, is paying a $40 million fine to federal prosecutors and a $10 million fine to the Federal
Reserve. AmSouth said the settlement will result in a $4 million pretax charge against third-quarter earnings.
In accepting the settlement, the U.S. Attorney's Office for the Southern District of Mississippi has agreed to take no further
action against the bank, as long as AmSouth takes a series of steps to enhance its compliance procedures.
The deal stems from an investigation into allegations involving two AmSouth customers and a scheme involving fraudulent notes
that were placed into a custodial account at the bank. The scheme triggered a number of civil lawsuits from individuals and
institutions allegedly defrauded by the AmSouth customers.
The federal investigation subsequently expanded to examine AmSouth's general procedures for policing its customers and spotting
suspicious activities.
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