Bank of New York Exec Resigns, Blasts Firm

Nearly two months into an international investigation into the possibility of money laundering at Bank of New York, a suspended executive who oversaw some of the accounts in question resigned. Natasha Kagalovsky, who had been on paid leave since Aug. 18 as head of the bank’s Eastern European division, submitted a letter of resignation blasting the bank for not defending her from “baseless rumor.” A federal grand jury has indicted one of Kagalovsky’s former subordinates, Lucy Edwards, alleging that Edwards conspired with two Russian businessmen to illegally transfer $7 billion through the bank in the last three years. Investigators are still trying to determine whether and how much of the money came from criminal activities in Russia or was improperly diverted international aid funds. Kagalovsky is married to Konstantin Kagalovsky, a top executive of AO Yukos Oil Co. who served as Russia’s representative to the International Monetary Fund from 1992 to 1995. In her resignation letter to Bank of New York Chairman Thomas Renyi, Kagalovsky wrote: “I do understand your concerns about the investigation, but none of them justify leaving me to swing in the wind, when nothing I ever did or didn’t do was wrong in any way.”