By Richard Vanderford
Stock exchange operator Nasdaq has agreed to pay $4 million in a settlement with the U.S. Treasury Department over alleged Iran sanctions violations.
A former Armenian subsidiary of Nasdaq allegedly processed trades and settled payments involving a sanctioned Iran-owned bank, the Treasury Department's Office of Foreign Assets Control said Friday. The transactions occurred on platforms the subsidiary provided to facilitate overnight loans and foreign exchange trading among Armenia's banks.
Nasdaq said it is pleased to have resolved the matter, adding it "maintains a robust compliance program and is committed to adhering to the highest levels of ethics and integrity."
New York-based Nasdaq in 2008 bought a Swedish financial company that owned the Armenian Stock Exchange. That exchange provided services to Mellat Armenia, the Armenian subsidiary of Iran's state-owned Bank Mellat, a sanctioned entity.
U.S. law in 2012 banned U.S.-controlled companies abroad from transacting even indirectly with the government of Iran. But Nasdaq compliance staff failed initially to grasp the implications of providing liquidity and foreign exchange services to Mellat Armenia, which was itself sanctioned, according to OFAC.
OFAC said Nasdaq failed to exercise "due caution" even though it had knowledge Mellat Armenia was trading on the Armenian exchange. Nasdaq became aware of the problem in 2014 and came forward to U.S. authorities, OFAC said.
OFAC said Nasdaq fully cooperated with its investigation and voluntarily reported its own violations. Nasdaq has also made efforts to improve its sanctions compliance program, OFAC said.
Nasdaq's Armenian subsidiary, then called Nasdaq OMX Armenia, made $16,000 from processing barred transactions, OFAC said. Nasdaq sold off its stake in the Armenian exchange in 2018.
Write to Richard Vanderford at Richard.Vanderford@wsj.com
(END) Dow Jones Newswires
December 08, 2023 18:26 ET (23:26 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
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