Banco Espirito Santo SA (BES), Portugal’s biggest publicly traded bank by market value, will pay $7 million to resolve U.S. claims that it violated U.S. securities law in selling brokerage services and investment advice.
The Lisbon-based bank served about 3,800 U.S.-based customers and clients from 2004 to 2009 without registering as a broker-dealer or qualifying for an exemption, the SEC said today in a statement. Banco Espirito Santo agreed to pay disgorgement, interest and fines without admitting or denying wrongdoing, the SEC said.
“Foreign entities seeking to provide financial or securities-related services in the U.S. must familiarize themselves with the statutory and regulatory framework in this arena,” Sanjay Wadhwa, associate director of the SEC’s New York Regional Office, said in the agency’s statement. “A failure to do so, as was the case here, can be a costly misstep.”
Separately, New York Attorney General Eric Schneiderman’s office said the Portuguese bank will pay $975,000 to resolve a state probe. Schneiderman’s office had also accused the bank of soliciting and selling securities to U.S.-based customers without registering itself or its affiliates as securities, as required under the state’s Martin Act.
Under the agreement with New York, the bank will cease and desist from further violations of the Martin Act, disgorge all profits derived from the alleged conduct and offer to make its customers whole for all the securities it sold unlawfully, Schneiderman’s office said in a statement.
Banco Espirito Santo spokesman Paulo Tome declined to comment.
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