“We are continuing to find examples of improper influence and misconduct in the bank consulting industry,” said Benjamin M. Lawsky, who heads the New York department. “When bank executives pressure a consultant to whitewash a supposedly ‘objective’ report to regulators – and the consultant goes along with it – that can strike at the very heart of our system of prudential oversight.”

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In the case of PricewaterhouseCoopers, the department initiated an investigation last summer into the firm’s review of foreign transactions processed by the Bank of Tokyo from 2002 to 2007. Around that time, the Japanese bank agreed to pay $250 million to settle New York charges that it cleared some 28,000 transactions totaling $100 billion for countries facing U.S. sanctions, including Iran, Sudan and Burma.

PricewaterhouseCoopers was hired by the Bank of Tokyo in 2007 to review transactions the bank processed for Iran and other countries under U.S. sanctions.

An initial draft of a report on the transactions detailed how the Japanese banking giant stripped out the names of Iranian clients to avoid detection. PwC also complained that its review was limited because of the late discovery that bank executives instituted a policy to remove information that would have triggered alerts, according to the agreement.

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But when a final report was released two weeks later, the consulting firm, acquiescing to bank demands, changed its tune and said the policy would have had no impact on its findings, according to the settlement. The firm also deleted sections of the draft report that discussed the wire-stripping policy, including the bank acknowledging doing business with “enemy countries” of the U.S.

PricewaterhouseCoopers stands by its work. Miles Everson, head of the firm’s U.S. advisory services, said in a statement that the report “identified relevant transactions that were self-reported to regulators” by the bank. He added that the review “disclosed the relevant facts” that the company “learned subsequent to its search process.”

The firm has said all along that it was not working at the behest of regulators, but was hired by the bank to conduct a voluntary review that was subject to edits. The report it produced, the firm has said, was the cornerstone of the New York investigation.

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Under the terms of the settlement, PricewaterhouseCoopers has agreed not to take any new engagements for 24 months that would require the New York regular to sign off on its advisory unit as an independent consultant.

A similar agreement was struck with Deloitte LLP’s financial advisory unit in June 2013, when the firm agreed to pay a $10 million fine and refrain for one year from new business with New York-regulated banks. That agreement was rooted in allegations that the firm watered down a report on money laundering controls at Standard Chartered Bank. Prior to the deal, the British bank agreed to hand $340 million to the New York regulators over processing transactions for Iran and other countries under sanctions.

New York’s top financial regulator is also looking into the work that Washington’s prominent consulting firm Promontory completed for Standard Chartered. Promontory determined that the British bank had illicitly funneled about $14 million to Iran, after the bank asked the firm to conduct a review for evidence of money laundering. The sum fell well short of the assessment by the New York financial regulator, which accused the bank of processing at least $250 billion in illicit transactions.

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Officials at Promontory declined to comment for this article. But in an interview last year with The Washington Post, Promontory chief executive Eugene Ludwig said the transactions in question were closer to the finding of the U.S. Treasury’s Office of Foreign Asset Control, which identified about $24 million in illegal transactions to Iran. Ludwig said Promontory was specifically looking for violations of Treasury standards, whereas regulators in New York had broader jurisdiction over the bank’s records.

Consultants have been engulfed in a firestorm over their alliances on Wall Street and influence in Washington. The surge in enforcement actions and new regulation since the financial crisis has at once propelled and disrupted the consulting business.

Troubles came to a head last fall when reports surfaced that PricewaterhouseCoopers, Promontory and other firms were paid nearly $2 billion by banks to examine shoddy mortgage files. The banks were supposed to pay out millions of dollars to borrowers for flawed foreclosure practices. In spite of the consultants’ hefty payday, not a single penny of relief reached the homeowners.