- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
The stunning, rapid collapse of Silicon Valley Bank (SVB), fueled in its final days by droves of panicked depositors seeking funds, likely added to the chaos within the bank and ratcheted up the risk of fraud, according to legal experts.
Troubled financial institutions are frequent targets for fraudsters looking for gaps in normal due diligence procedures to exploit, said Michael Dailey, partner at Dinsmore & Shohl and co-chair of the law firm’s commercial finance and banking practice group.
“No doubt about it: Any time some crisis hits, whether in business or from a hurricane that runs through, some of the first folks that crawl out of the wreckage are the scam artists,” said Dailey.
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A new report from the Committee of Sponsoring Organizations of the Treadway Commission offers a blueprint to organizations for establishing an overall fraud risk management program.
The details of the Prudential Regulation Authority’s case against Wyelands Bank and the business coming from the group of companies that owned it raise questions about the risks such exposure causes to financial institutions, their customers, and the sector at large.
The Failed Bank Executives Clawback Act seeks to require the Federal Deposit Insurance Corporation to claw back five years’ worth of compensation from executives who lead failed banks.
Insurers embracing artificial intelligence-based technologies might pose serious risks to companies buying insurance if the risk data used to price their insurance premiums is used to train AI algorithms or shared on commonly used chatbots like ChatGPT.
Risks posed by money laundering and the financing of terrorism have dramatically increased in Singapore, according to a recent survey of the city-state’s financial institutions conducted by the Monetary Authority of Singapore.
Establishing a set of policies and procedures to prevent employee use of nonauthorized electronic communications to conduct business is relatively straightforward. The hard part is monitoring compliance.
