Daiwa Bank Ltd.'s decision to plead guilty to 16 criminal charges and pay $340 million in fines should send a clear signal that banks will pay dearly if they try to deceive federal regulators, lawyers said.

"The government has certainly sent a message to the banking industry, foreign and domestic, that they are not going to take this any more," said Stanley A. Twardy, the former U.S. Attorney for Connecticut who is now a partner at Day, Berry & Howard in Stamford, Conn.

"I can't think of any case where you have ever had a fine like this and had the company effectively put out of business."

The Federal Reserve Board yanked Daiwa's license to operate in the United States last November. Sumitomo Bank Ltd. bought most of the bank's U.S. assets in January.

The Daiwa scandal started last July when Toshihide Iguchi, a bond trader in its New York branch, confessed to his superiors that he had accumulated $1.1 billion of trading losses over 11 years and had covered them up. Daiwa managers compounded the problem by concealing the illegal trades from U.S. regulators for nearly two months.

Daiwa's chairman, president, and several other officers resigned over the scandal.

"The price we are paying to close this chapter of our history is a severe one," Daiwa president Takashi Kaiho said in a statement Wednesday. While the $340 million fine is among the largest ever paid, the case could have cost the Osaka-based bank $1.3 billion.

The lesson is pretty straightforward, said Gil Schwartz, a partner in the Washington law firm of Schwartz & Ballen. "It is not nice to lie to the government, and if you get caught, you are going to have to pay a very stiff penalty," he said.

"It sends the message that institutions must be scrupulous in their dealings with the government, under pain of very significant penalties," added a lawyer familiar with the case, who requested anonymity.

The lawyers praised Reid Figel, chief of the securities fraud unit in the Manhattan U.S. Attorney's office, for driving a hard bargain.

"To put this in perspective, it is $340 million, and the bank is out of business," Mr. Twardy said. "What more could be accomplished?"

Mr. Figel also played starring roles in the investigations of Banca Nazionale del Lavoro, Columbia Savings and Loan, and Drexel Burnham Lambert.

"He is an experienced prosecutor with an excellent reputation," said Howard Heiss, Mr. Figel's former boss in the U.S. Attorney's office and now a partner at Morrison & Foerster in New York. "He's a meticulous lawyer and a worthy adversary."

Lawyers who know Mr. Figel point to his work in the Lavoro case as proof of just how well he ferrets out financial fraud. In 1993, the U.S. Attorney in Atlanta charged that Christopher P. Drogoul, BNL's Atlanta branch manger, had made more than $4 billion of illegal loans to Iraq.

Mr. Figel and Mr. Heiss were thrown into the case two months before the trial date. They whittled down the indictment from nearly 350 counts to about 75 and were able to negotiate a last-minute plea bargain - just as in the Daiwa case.

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