Mitsubishi UFJ Financial Group Inc. declined comment Wednesday on whether it was being investigated by American financial authorities on suspicion of inadequate monitoring for money-laundering.
The Nihon Keizai Shimbun reported Wednesday that the U.S. Federal Reserve and other U.S. authorities may penalize the major banking group as soon as this month, a move that may endanger its plans to set up a U.S. holding company. The report said the penalty could include a fine but did not specify an amount.
A spokesman for Mitsubishi UFJ, requesting anonymity because the bank rarely gives out such names, said it could not comment on the report.
The Nikkei's report said the penalty is likely for slack reporting of suspicious fund transfers and account openings at Bank of Tokyo-Mitsubishi UFJ's New York branch and at the New York-based Bank of Tokyo-Mitsubishi UFJ Trust Co.
Although a possible penalty likely won't affect the bank's daily operations, it could hurt its reputation for corporate governance, the Nikkei said.
Due to the investigation, the bank may also be forced to put on hold its plans to create a financial holding company in the U.S., which would require the approval of U.S. authorities, the report said.
That will put Mitsubishi UFJ at a disadvantage compared to rival Mizuho Financial Group, which is on track to set up a U.S. holding company, according to the Nikkei.