China State-Owned Bank - face U.S. whistleblower claim AML breaches – ruling
A Manhattan federal judge on Thursday revived a whistleblower claim by a former Agricultural Bank of China Ltd (601288.SS) chief compliance officer in her $8 million (6 million pounds) discrimination lawsuit against the Chinese state-owned bank.
U.S. District Judge Paul Engelmayer said Natasha Taft may try to show that AgBank reduced her authority and disparaged her in retaliation for her reporting a possible violation of the Bank Secrecy Act, an anti-money laundering law, to the Federal Reserve Bank of New York.
Engelmayer had in January rejected the whistleblowing claim, but revived it after Taft’s amended complaint added “substantial new allegations” about what she told the New York Fed.
Taft claimed that AgBank drove her to quit last June, after just 10 months on the job, by discriminating on the basis of her whistleblowing and her gender, including comments by senior colleagues about her physical appearance. She said she had been the only non-Chinese female manager in AgBank’s New York office.
Glenn Kurtz, a White & Case partner representing AgBank, did not immediately respond to requests for comment. The amended complaint outlined communications between Taft and a New York Fed supervisor over whether AgBank might have been violating the Bank Secrecy Act’s “Travel Rule” by concealing customer identities on many transactions. Taft said that after the New York Fed in February 2015 urged AgBank to improve its screening, management “became furious” and sought to punish her for “impacting their business and exposing the bank to potential compliance and regulatory consequences.”
AgBank countered that Taft had merely sought guidance from the New York Fed, that it could not have retaliated against her because she never revealed what was said, and that a report to the New York Fed did not qualify for whistleblower protection. But Engelmayer said Taft alleged that the New York Fed “clearly had concerns” about AgBank, and that he could not say these concerns “did not bespeak a possible violation of law.” He also said it was “more consistent” with the purpose of the Bank Secrecy Act for someone like Taft to report concerns to a local regulator she might already be familiar with. “Compliance officers act as arms of the government, and this decision reinforces the rights that these individuals have in the workplace,” said Brian Heller, a lawyer for Taft.
The case is Taft v. Agricultural Bank of China Ltd, U.S. District Court, Southern District of New York, No. 15-05321.