Last year’s PNC Financial’s buyout of Riggs Bank is likely to be affected by the outcome of criminal charges against the Washington-based fi...

Last year’s PNC Financial’s buyout of Riggs Bank is likely to be affected by the outcome of criminal charges against the Washington-based financial firm arising from its services for foreign embassies and wealthy clients. A report in The Wall Street Journal has said the Riggs board has been presented with a plea agreement by prosecutors. The deal would involve the bank admitting to one count of violating the Bank Secrecy Act by failing to file reports to regulators on suspicious transfers and withdrawals. The bank is expected to accept the plea and pay a fine of between $16 million and $18 million. PNC Financial paid $321 million in cash and 7.5 million shares of PNC stock, which valued the deal at $779 million at the time it was announced. According to the WSJ, the deal has been in doubt with the criminal probe under way. PNC is likely to want to renegotiate the terms of the buyout once Riggs works out a deal with the Justice Department. The Pittsburg-based bank has the right to do so under a “material adverse change” clause in the sale contract. Separately, a number of other banks are being investigated by US Federal prosecutors and regulators since the Riggs scandal emerged last year. Recently, Banco de Chile disclosed that the Office of the Comptroller of the Currency and the Federal Reserve Bank of Atlanta are conducting targeted examinations involving two of the company's US branches. The OCC is looking into Banco de Chile's New York branch to determine the bank's compliance with the US Bank Secrecy Act and anti-money-laundering requirements regarding certain accounts, the company said in a regulatory filing.