Thomas A. Renyi, chairman and chief executive officer of Bank of New York Co., told employees Monday that he was "deeply troubled by the possibility that our controls may have been compromised" in the Russian money-laundering scandal that has turned an unwelcome spotlight on the bank.
"This is a matter of deepest concern to me and to all of you," Mr. Renyi said in a memorandum. "We will not tolerate any action that tarnishes our reputation. We will do whatever is needed to prevent illegal or improper activities that involve the bank."
Mr. Renyi said Bank of New York has reacted swiftly to assess its internal systems.
"We are thoroughly examining our funds transfer controls and processes," he said. "If any investigation into this matter indicates flaws in the bank's internal procedures, they will be addressed immediately."
The $68 billion-asset banking company is at the center of an international law enforcement probe.
It acknowledged earlier this month that it has been cooperating with the U.S. Attorney's office in New York, which is looking into the possibility that as much as $10 billion may have been filtered through a half-dozen accounts at the bank since last summer. Some of the funds reportedly were linked to Russian organized-crime figures.
The bank said it has not been accused of any wrongdoing and that no customer or bank funds have been lost.
Republic New York Corp. has also said it is cooperating with federal authorities, who have been monitoring transfers of money through an account at Republic to and from Benex Worldwide Ltd., a London company that has been connected with the investigation.
As the details emerged over the last week, some observers questioned whether Bank of New York adequately monitored its account activities.
People familiar with the matter said Bank of New York employees have grown increasingly frustrated with the criticism; the employees argue that the bulk of the money transfers occurred after the federal probe began last August. Bank of New York, like Republic, was asked by investigators to leave the suspected accounts open so that transactions could be monitored.
Mr. Renyi said in the memo that the bank would take "prompt action" if the investigation proved inappropriate action by any employee.
Bank of New York last week fired Lucy Edwards, a vice president in its Eastern European division whose husband, Peter Berlin, a Russian businessman, has been linked to some of the accounts being investigated. Allegations of misconduct and violation of internal policies are said to have been behind Ms. Edwards' dismissal.
A senior vice president, Natasha Gurfinkel Kagalovsky, remains on administrative leave pending the outcome of the investigation. She ran Bank of New York's Eastern European business and was Ms. Edwards' boss. Neither woman has been charged with a crime.
In a statement issued through her lawyer last week, Ms. Kagalovsky denied any wrongdoing. Ms. Edwards has not been available for comment.