This story has been updated, on June 21, 2013.

Deloitte Financial Advisory Services LLP, a subsidiary of major accounting firm Deloitte LLP, suffered a blow on Tuesday, agreeing to a $10 million fine and a one year ban on some new consulting work with financial institutions regulated by New York state.

Announced by New York Gov. Andrew Cuomo, the agreement came after a state investigation found that Deloitte Financial Advisory Services LLP's work advising British bank Standard Chartered PLC (LON:STAN) was characterized by “misconduct, violations of law, and lack of autonomy.”

Specifically, a state investigation found that Deloitte didn’t stay independent enough of Standard Chartered, and gave Standard Chartered confidential information on other Deloitte clients.

In one case, Deloitte removed a recommendation aimed at combating money laundering from a report to the New York State banking department, at Standard Chartered’s behest. The banking department had ordered a review of Standard Chartered’s anti-money laundering measures in 2004.

The settlement will be used as a model to reform industry practices by consultants who advise banks and other financial groups, said the state. It is the first step in a broader crackdown on financial consulting by top New York financial regulator Ben Lawsky, who has used an obscure state law to help him in his mission, reports the New York Times.

Lawsky described the consulting industry as sometimes “infected by an ‘I’ll scratch your back if you scratch  mine’ culture and a stunning lack of independence,” in a statement.

“Our aggressive work investigating and reforming the consulting industry is far from over and will continue in the days, weeks, and months ahead,” said Lawsky, the state’s superintendent of financial services.

Under the agreement, Deloitte must boost its safeguards against conflicts of interest. For Deloitte and any future consultants hired by a bank after a state regulatory order, past work must be disclosed and other reporting stepped up.

In a statement to IBTimes, Deloitte said it agreed to the settlement with the state voluntarily, and noted that the investigation found no evidence that Deloitte knew of, aided, or concealed any alleged wrongdoing by Standard Chartered.

It added that it would "work constructively" with state regulators to establish best industry practices for financial consultants, specifically those retained by state-regulated banks.

Standard Chartered paid state regulators $340 million to settle charges stemming from the same investigation in September 2012, and agreed to step up its measures preventing money-laundering.

Here is the agreement between New York state and Deloitte in full.