Echevarria, CEO since June 2011, defended Deloitte in his first interview since the firm was dragged into the spotlight over its independent reviews of British bank Standard Chartered.

The New York State Department of Financial Services, in a case involving U.S. anti-money laundering laws, last week said Deloitte consultants omitted critical details in a report to regulators about Standard Chartered.

The regulator cited an email from a Deloitte partner saying he drafted a "watered-down version" of the report after being asked by Standard Chartered to omit information.

"It's an unfortunate choice of words that was pulled out of context," Echevarria said.

A source close to the matter, who asked to remain anonymous because of its sensitive nature, said the Department of Financial Services has no plans to bring charges against Deloitte. A spokesman for the department refused to confirm or deny that statement.

Echevarria said he was standing in line with his 16-year-old son at Universal Studios in Orlando, Florida a week ago when he first heard of the Standard Chartered matter by email.

A Bronx native in his 35th year at Deloitte, Echevarria said one of his first thoughts was, "There's got to be more to this."

CEO SAYS FIRM BEHAVED RESPONSIBLY

The head New York banking regulator, Benjamin Lawsky, alleged Standard Chartered hid from regulators some 60,000 "secret transactions" tied to Iran. Standard Chartered has said the regulator's account did not present "a full and accurate picture of the facts."

Lawsky said that at one point, Standard Chartered asked Deloitte to delete from its draft report any reference to payments that could reveal the bank's practices involving Iranian entities.

Lawsky quoted an email from a Deloitte partner who said "we agreed" to the request.

Echevarria declined to discuss specific allegations, but in a statement last week, Deloitte said "contrary to the allegation," it "absolutely did not delete any reference to certain types of payments" from a final report. Deloitte said the report did not include a recommendation that had been included in a prior draft.

"Presumably the facts will bear out that we certainly held up all the standards required and behaved in an ethical and responsible way," Echevarria said.

Banking regulators did not name the Deloitte partner involved but said his title was global leader of anti-money laundering and trade sanctions. A person familiar with the report has said the partner was Michael Zeldin, a former Justice Department official.

Asked if Deloitte has taken action against anyone at the firm, Echevarria said he could not comment on anything involving personnel or privacy issues.

CEO SAYS PROCESSES IN PLACE FOR VIOLATIONS

In another damaging charge, the banking regulator said Deloitte gave Standard Chartered two reports with highly confidential client information - an allegation that, if true, would violate one of the cardinal rules in the consulting business.

"We have pretty robust processes in place for behavior that violates law, rules or firm policies," Echevarria said. "Appropriate actions are taken when individuals are found to have done that."

Echevarria said Deloitte staff quickly sent out "talking points" to partners that they could use if clients had questions about the Standard Chartered matter.

Deloitte had been retained as part of a legal agreement between Standard Chartered's New York branch and banking regulators following other compliance failures by the bank, according to the Department of Financial Services.

Echevarria, who rose through the auditing ranks to become CEO, has battled a series of reputational hits since taking over the U.S. firm.

Late last year, the firm came under scrutiny from a member of Congress after audit industry regulators unsealed parts of a report criticizing quality controls at Deloitte's corporate auditing business. Deloitte said at the time that it had made investments to improve its audit practice.

Deloitte consultants separately had overseen a review of HSBC banking transactions after that bank was cited for multiple anti-money laundering failures.

A Reuters review last month on that operation reported that managers were more concerned with clearing out paperwork as fast as possible than in investigating transactions linked to illegal activities.

A Deloitte spokesman said in July that Deloitte's "work for HSBC was rigorous and thorough."

Echevarria insisted that the Deloitte brand is well-regarded despite the problems. "These sorts of things to me are the outliers," he said. "They are not the nature of the firm."

(Additional reporting by Carrick Mollenkamp; Editing by Kevin Drawbaugh and Richard Chang)

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