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Bank of Tokyo-Mitsubishi (BTMU) has been fined $315m (£200m) by US authorities for watering down a report about transactions involving Iran and other sanctioned countries.

Key warnings were removed from the report by PricewaterhouseCoopers (PwC), due to pressure from BTMU employees, New York State regulators found.

One BTMU employee resigned following the investigation.

Two others were banned from working with any New York banks.

"It is clear that we - as a regulatory community - must work aggressively to reform the cozy relationship between banks and consultants, which far too often has resulted in shoddy work that sweeps wrongdoing under the rug," said Benjamin Lawsky, New York's superintendent of financial services.

PricewaterhouseCoopers, which prepared the report, found that BTMU had been telling employees to remove information from messages that would have triggered compliance alerts.

In an earlier draft of its report PwC highlighted the significance of that discovery.

But later, at the bank's request, PwC replaced that section, according to the investigation.

The New York State investigation also found that other important information was removed from the PwC report, at the request of BTMU. That included:

An English translation of BTMU's instructions to employees which referenced the bank doing business with "enemy countries" of the US

most of PwC's discussion about the bank's manipulation of messages

a section that discussed how BTMU disguised messages by using characters in names. For example SUD#N.

The latest fine is in addition to a $250m fine BTMU agreed to in June 2013, for conducting billions of dollars of transactions for governments and private bodies in Iran, Sudan and Myanmar.

Responding to the latest fine BTMU said it is "committed to conducting business with the highest levels of integrity and regulatory compliance, and to continually improving its policies and procedures."​