British bank Lloyds TSB is facing charges that it knowingly helped launder millions of dollars from an alleged securities fraud.
In a statement today the bank said it would fight the charges, brought by US prosecutors, "vigorously".
The US attorney's office in New York claims that Lloyds TSB and the Bank of Cyprus allowed the former chairman of an American software company to launder the proceeds of a massive securities fraud.
Prosecutors have said that they are seeking damages of at least $130 million (£64 million) from Lloyds TSB and penalties of at least $162 million (£80 million) from Bank of Cyprus.
Both banks have denied violating US federal laws on money laundering.
"We do not believe there is any basis for this action so we are disappointed that the US government has commenced proceedings in this case," said Lloyds TSB.
"We intend to defend the action vigorously and are confident the bank's stance will be vindicated," added the company.
"We cannot comment further as this is now the subject of legal proceedings."
Lloyds TSB and the Bank of Cyprus are accused of allowing Lycourgos Kyprianou, former chairman of software company AremisSoft, to launder millions of dollars from an alleged securities fraud involving the firm.
Prosecutors say that the Cypriot national was indicted on securities fraud, money laundering and conspiracy charges in 2002, in connection with an alleged insider-trading scam concerning AremisSoft.
The company filed for bankruptcy amid the allegations.
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