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For immediate release
March 7, 1997
The Federal Reserve Board today announced the issuance of
a combined Order to Cease and Desist and Order of Assessment of a
Civil Money Penalty against Oliver Lu, a former employee of BT Co.,
Tokyo, Japan, a subsidiary of Bankers Trust New York Corporation,
New York.
Mr. Lu, without admitting to any allegations, consented
to the issuance of the Order in connection with his alleged
involvement in the structuring of leveraged derivative
transactions marketed and sold to customers of Bankers Trust New
York Corporation and its subsidiaries.
Mr. Lu paid a civil money penalty of $50,000.
A copy of the Board's Order is attached.
Attachment
UNITED
STATES
OF ANERICA
BEFORE
TBE
BOARD OF GOVERNORS OF THE
FEDERAL
WASHINGTON,
SYSTEM
D.C.
Docket Nos. 96-006-B-14
96-006-CMP-14
---X
In the Matter of
OLIVER LU
A Former Employee and
Institution-Affiliated
Party of
BANKERS TRUST NEW YORK CORPORATION
New York, New York
RESERW
:
Order to Cease and Desist
and Order of Assessment
of a Civil Money Penalty
Issued Upon Consent
Pursuant to the Federal
Deposit Insurance Act,
as Amended
BT CO. TOKYO
Tokyo, Japan
__________________________~__~__~__ X
WHEREAS, pursuant to Sections 9(b) (1) and S(i)
of the Federal Deposit Insurance Act, as amended, 12 U.S.C.
.5§ 1919(b) (I) and 1919(i) (the "FDI Act"), the Board of Governors
of the Federal Reserve System (the 'Board of Governors") issues
this combined Order to Cease and Desist and Order of Assessment
of a Civil Money Penalty (the "Order") against Oliver Lu ("Lu"),
a former employee of BT Co. Tokyo and an institution-affiliated
party, as defined in Sections 3(u) and S(b) (3) of the FDI Act,
(12 U.S.C. §§ 1813(u) and 1816(b) (3)), of Bankers Trust New York
’
Corporation, New York, New York ("BTNYCll),a registered bank
holding company, in connection with Lu's involvement in the
structuring of leveraged derivative transactions to be marketed
and sold to customers of BTNYC and its subsidiaries; and
WHEREAS, by affixing his signature hereunder, Lu has
consented to the issuance of this Order by the Board of Governors
and consented to comply with each and every provision of this
Order, and waived any and all rights he might have pursuant to
12 U.S.C. § 1818 or 12 C.F.R. Part 263, or otherwise
(a) to the
issuance of a notice of charges and of hearing and of a notice
of assessment of a civil money penalty;
(b) to a hearing for the
purpose of taking evidence with respect to any matter implied
or set forth in this Order; (c) to obtain judicial review of
this Order or any provision hereof; and (d) to challenge or
contest in any matter thenbasis, issuance, validity, effectiveness, collectibility or enforceability of this Order or any
provision hereof.
NOW, TREREFORE, prior to the taking of any testimony
or adjudication of or finding on any issue of fact or law
herein, and without this Order constituting an admission of
any allegation made or implied by the Board of Governors in
connection with this proceeding, and solely for the purpose
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of settlement of this proceeding without protracted or extended
hearings or testimony:
IT IS REREBY ORDERED, pursuant to Sections 8(b) and
B(i) of the FDI Act, that:
i.
For a period of two years from this Order,
Lu shall not serve as an institution-affiliated party of
any institution or agency specified in Section 8(e) (7) (A) of
the FDI Act, (12 U.S.C. § 1818(e) (7) (A)), including a bank, bank
holding company, or nonbank subsidiary, where his duties include,
directly or indirectly:
(a) Participating in the structuring of derivative
transactions for marketing or sale to customers, with the
exception of exchange traded options and plain vanilla currency
or interest rate swaps with maturities not to exceed ten years;
(b) advising any customer regarding the purchase,
sale or structuring of a derivative transaction; or
(c) preparing marketing materials regarding
derivative transactions.
2.
For a period of two years from this Order, Lu shall
not serve in any other capacity as an institution-affiliated
party of any institution or agency specified in
Section 8(e) (7) (A) of the FDI Act without the prior written
-3-
approval of the Federal Reserve Bank of New York (the "Reserve
Bank")
.
3.
Upon becoming an institution-affiliated party
involved in structuring derivative transactions for the marketing
or sale to, or on behalf of customers, depositors, or borrowers
of any institution or agency specified in Section S(e) (7) (A) of
the FDI Act, Lu shall take such actions as are necessary to
ensure that he and the institution or agency markets and sells
such transactions
in a manner that is consistent with safe and
sound banking or business practices, federal and state laws, and
the rules and regulations of the Board of Governors.
4.
Lu shall pay to the Board of Governors a civil
money penalty in the sum of $50,000.
No portion of Lu's civil
money penalty shall be, directly or indirectly, paid, advanced,
reimbursed or otherwise funded by BTNYC, or any affiliate or
subsidiary thereof.
5.
The penalty assessed by this Order shall be
remitted in full, at the time of Lu's execution of this Order,
payable to the "Board of Governors of the Federal Reserve
System" and forwarded with Lu's executed copy of this Order, to
William W. Wiles, Secretary of the Board, Board of Governors of
the Federal Reserve System, Washington, DC
-4-
20551, who shall make
remittance of the same to the Treasury of the United States as
required by statute.
6.
All communications regarding this Order shall be
sent to:
(a)
Ms. Christine M. Cumming
Senior Vice President
Federal Reserve Bank
of New York
33 Liberty Street
New York, NY 10045
and a copy to:
Karen E. Gifford, Esq.
Legal Department
Federal Reserve Bank
of New York
33 Liberty Street
New York, NY 10045
(b)
7.
Oliver Lu
c/o Linda Imes, Esq.
Richards Spears Kibbe & Orbe
One Chase Manhattan Plaza
New York, NY 10005
Each provision of this Order shall remain effective
and enforceable until stayed, modified, terminated or suspended
by the Board of Governors.
0.
The provisions of this Order shall not bar, estop
or otherwise prevent the Board of Governors, the Reserve Bank or
any federal or state agency or department from taking any other
action affecting Lu.
Lu agrees and acknowledges that this Order
-5-
does not bar or estop any criminal charges or prosecutions
against him, and Lu hereby waives any right he might otherwise
have based upon this Order to assert a defense of double jeopardy
in any criminal proceeding.
By order of the Board of Governors of the Federal
Reserve System, effective this d%ay
of
M&-e4
(
1997.
BOARDOF GOVERNORS OF THE
FEDERAL RESERVE SYSTEM
i
a
,
By:
&!a--
?
William W. Wiles
Secretary of the Board
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