New York-based stock exchange Nasdaq Inc agreed to pay a $4m settlement to the US Department of Treasury over apparent violations of sanctions law by a former Nasdaq unit called Nasdaq OMX Armenia, the department’s Office of Foreign Assets Control (OFAC) said.

Specifically, Nasdaq OMX Armenia provided services to Iran and Iran’s state-owned Bank Mellat, OFAC said. “The settlement amount reflects OFAC’s determination that Nasdaq’s conduct was non-egregious and voluntarily self-disclosed,” the agency said.

Failure to exercise due caution

Under US law as of 2012, US-controlled companies abroad were banned from transacting even indirectly with the government of Iran.

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. The transactions occurred on platforms the subsidiary provided to facilitate overnight loans and foreign exchange trading among Armenia’s banks, OFAC said.

Sanctions implications

OFAC said neither Nasdaq OMX Armenia nor Nasdaq properly understood the sanctions implications of Mellat Armenia’s participation on the platforms that Nasdaq OMX Armenia owned and operated. This failure to exercise due caution, OFAC said, continued until September 2014, when Nasdaq identified the sanctions compliance implications of Mellat Armenia’s participation on the platforms that Nasdaq OMX Armenia owned and operated.

OFAC said Nasdaq fully cooperated with its investigation, voluntarily reported its own violations and made efforts to improve its sanctions compliance program. The settlement amount reflects OFAC’s determination that the apparent violations were non-egregious and voluntarily self-disclosed.