The Florida unit of Banco Espírito Santo SA is being investigated by the Securities and Exchang Commission, the Federal Deposit Insurance Corp., Florida’s financial regulator and a Wall Street self-regulatory organization,
the
Wall Street Journal
reported.
The officials are looking into the bank’s business with an Espírito Santo bank in Panama, the article said. “Virtually all of the Panama bank’s business was with various parts of the Espírito Santo group and family, according to Panama’s financial regulator, which seized the bank in July,” the
Journal
article said.
Portuguese authorities suspect Espírito Santo of selling its own debt to the bank’s customers, who didn’t know what the risks were, the article said.
The Florida unit, based in Miami in a 36-story building owned by another Espírito Santo company, caters to wealthy South Americans, the
Journal
report said.
“The manner in which wealth managers at the Miami bank — including Jorge Leite Espírito Santo Silva, the Espírito Santo family’s top representative in the U.S. — conducted business with clients of the Panamanian bank violated the Miami bank’s internal rules and might have breached state and federal banking and securities laws….,” the
Journal
article said.
Jorge Espírito Santo was fired by the Miami bank on July 22. He had served on the Miami bank’s board and was chairman of the Panama bank’s board, the article said. He was pictured in the Miami bank’s ads and marketing materials touting its family heritage, the
Journal
report noted. (Source:
Wall Street Journal
, Sept. 17, 2014.)
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