Financial Services


WellsFargo

Wells Fargo must do more than pay to redeem fake account scandal

2020-08-14T18:09:00+01:00By

Wells Fargo is now operating under a different regime, but what have the billions of dollars the bank has spent in attending to the compliance failures that arose out of its fake account scandal delivered? Not enough, posits Martin Woods.

Federal Reserve

Federal banking regs clarify BSA/AML compliance violation response

2020-08-14T18:00:00+01:00By

Two strikes and you’re out, say four federal agencies to repeat violators of Bank Secrecy Act/anti-money laundering compliance requirements.

Roemerindex

Wells Fargo CCO Roemer to depart amid new risk hirings

2020-08-14T16:09:00+01:00By

Wells Fargo announced Chief Compliance Officer Mike Roemer will depart two years after taking on the daunting task of transforming the troubled bank’s compliance and risk management efforts. Paula Dominick will succeed him as CCO.

SEC

OCIE risk alert offers coronavirus-related advice to investment, brokerage firms

2020-08-13T17:22:00+01:00By

Many of the coronavirus-related risks recently highlighted by the Office of Compliance Inspections and Examinations are well-known, but the agency made a point of mentioning fees and expenses.

Money laundering

Basel Committee issues final AML risk management guidance

2020-08-11T17:49:00+01:00By

The Basel Committee on Banking Supervision recently issued an updated version of its guidelines on sound management of risks related to anti-money laundering and combating the financing of terrorism.

bank

Basel Committee seeks comment on principles for operational resilience

2020-08-11T16:35:00+01:00By

The Basel Committee on Banking Supervision is seeking comment from the financial services industry on its proposed principles for operational resilience that aim to enhance banks’ ability to withstand, adapt to, and recover from potentially severe adverse events.

CapitaoOneStory

OCC fines Capital One $80M over 2019 data breach

2020-08-07T17:10:00+01:00By

Capital One and Capital One Bank (USA) were fined $80 million for failing to establish sound risk management processes and internal controls related to the company’s data breach last year.

KYC

Common sense KYC: Customers should supply the knowledge

2020-08-07T15:39:00+01:00By

No one knows a customer better than the customer. As such, financial crime expert Martin Woods believes the onus should be on the customer to provide the required data to keep KYC logs up to date.

KYC

Firms must apply contact tracing rules to bank relationships

2020-08-04T15:28:00+01:00By

In order to prevent debacles like the one Deutsche Bank is embroiled in, there is a need to combine the processes of “know your employee” and “know your customer,” writes Martin Woods.

SEC

Conn. investment firm fined $100K for trading, compliance failures

2020-08-03T17:21:00+01:00By

A small Connecticut investment firm has agreed to pay a $100,000 fine to settle charges levied by the Securities and Exchange Commission regarding unfair trade allocation and accompanying compliance failures.

Credit Suisse

Credit Suisse combines risk and compliance, adds sustainable investing unit

2020-07-31T15:54:00+01:00By

Credit Suisse has combined separate risk and compliance heads into one board-level position, part of a shakeup of the bank’s corporate structure that includes a renewed emphasis on sustainable investing.

Masks

While compliance is in vogue, let masks be a symbol of safety in all situations

2020-07-30T17:36:00+01:00By

Now is the time to market compliance practices to customers who wear masks within our premises but drop the masks—and their guards—when answering calls and emails from the privacy of their own homes, writes Martin Woods.

Paperwork overload

SARs overload slowing efforts to combat financial crime

2020-07-29T14:43:00+01:00By

For the global AML community, there is a need to recognize too much valuable time is spent filing too many low-value suspicious activity reports that will never become the subject of any law enforcement action, writes Martin Woods.

Ghost CCO

The problem with ‘ghost CCOs’ and the haunting consequences

2020-07-27T13:01:00+01:00By

If you’re a small investment firm owner acting as your firm’s chief compliance officer, here are some scary stories that might keep you up at night.

GoldmanSachs

Goldman Sachs reaches $4B 1MDB settlement with Malaysia

2020-07-24T15:30:00+01:00By

Goldman Sachs reached a nearly $4 billion agreement in principle with the Government of Malaysia to resolve all criminal and regulatory proceedings related to three 1MDB bond transactions.

AccountingUpdateFeature

FASB proposes new chapter for financial reporting framework

2020-07-23T18:11:00+01:00By

The Financial Accounting Standards Board has proposed a new chapter to Concepts Statement No. 8 that would define 10 elements of financial statements.

NYStateLaw

First American first charged with NYDFS cyber-regulation abuses

2020-07-22T18:17:00+01:00By

First American Title Insurance Company has become the first firm to face charges alleging violations of the New York State Department of Financial Services’ Cybersecurity Regulation.

United Kingdom Russia

U.K.’s Russia report underscores need to question big money

2020-07-22T15:06:00+01:00By

The U.K.’s long-awaited report on Russian interference in the country stresses the importance for big money to be subject to enhanced levels of due diligence, writes financial crime expert Martin Woods.

UBScrop

SEC fines UBS $10M over municipal bond offerings

2020-07-21T19:01:00+01:00By

UBS Financial Services has agreed to pay more than $10 million to resolve SEC charges that it circumvented the priority given to retail investors in certain municipal bond offerings.

FedBankReg

OCC proposal seeks to clarify when banks are ‘true lender’

2020-07-21T15:45:00+01:00By

The Office of the Comptroller of the Currency has proposed a rule meant to eliminate ambiguity in federal banking regulations regarding loans made by national banks and their third-party partners.

Commerzbank

Commerzbank fine demonstrates danger of AML lapses

2020-07-16T17:57:00+01:00By Jake Plenderleith, International Compliance Association

The Financial Conduct Authority’s fine of £37.8 million (U.S. $47.5 million) on Commerzbank’s London branch is a reminder that the most fundamental risk-based AML controls are still not being implemented at some financial services firms.

Nailedit1200x800

Nailed It or Failed It? Twitter’s meltdown exposes major vulnerability

2020-07-16T09:29:00+01:00By Compliance Week

In this week’s “Nailed It or Failed It?”, we reflect on the most troubling aspect of Wednesday’s giant Twitter hack while giving Wells Fargo a rare kudos for being good corporate citizens.

Ransomware

OCIE issues ransomware alert to financial services

2020-07-15T14:49:00+01:00By DeAnn Orie

The SEC’s Office of Compliance Inspections and Examinations is advising financial firms to beware of a rise in more sophisticated ransomware attacks.

Money

Analysis: When clean money is used for dirty purposes

2020-07-10T16:28:00+01:00By

There are times when it is a necessary to consider where clean money is going to as much as where dirty money may have come from, writes financial crime expert Martin Woods.

KYC-Tech

What regulators want to know about KYC technology

2020-07-09T13:06:00+01:00By

So, your company has decided to embark on an update of its legacy Know Your Customer system. Hear from experts on how to begin the process of onboarding that tech to the regulators.

COVID-scam

FinCEN issues advisory on coronavirus-related financial scams

2020-07-08T16:33:00+01:00By

The Financial Crimes Enforcement Network has issued an advisory on the types of coronavirus-related scams and schemes that financial institutions should be on alert for—for example, “mule money schemes”—and how and where to report such activity.

columnist icons - kyle

Deutsche Bank rightly paying the price for looking the other way on Epstein

2020-07-08T13:38:00+01:00By

In terms of Know Your Customer, Deutsche Bank knew what it had with Jeffrey Epstein. It just didn’t care enough to do anything about it.

Deutsche

Deutsche dinged $150M for compliance failures related, in part, to Jeffrey Epstein

2020-07-07T16:41:00+01:00By

Deutsche Bank will pay $150 million in penalties under a consent order with New York State for “significant compliance failures” regarding, in part, its former relationship with accused child sex trafficker Jeffrey Epstein.

Wirecard

Wirecard scandal will have cascading impact on Germany’s audit, regulatory landscape

2020-07-07T15:30:00+01:00By

Wirecard already is shaping up to be to Germany what Enron was to the United States: An accounting oversight failure so epic in its scope and scale that its aftermath is likely to forever alter the country’s auditing and accounting profession as it exists today.

Money laundering

Managing emerging trade-based money laundering risks

2020-07-02T14:38:00+01:00By Jake Plenderleith, International Compliance Association

Trade-based money laundering was already happening prior to the coronavirus pandemic, but now its nature has shifted. The ICA offers key considerations for managing emerging risks.

RisingRisk

OCC report highlights elevated compliance risks in banking

2020-07-01T18:30:00+01:00By

The Office of the Comptroller of the Currency published a new report describing key issues facing the federal banking system and the effects of the coronavirus pandemic on the banking industry.

Wirecard

In time of crisis, Wirecard has turned to its would-be CCO to lead

2020-06-30T15:58:00+01:00By

Reeling from a $2 billion accounting scandal, Wirecard has turned to its would-be chief compliance officer as its interim CEO. It’s the first smart move the company has made in a while, writes Martin Woods.

Supreme Court

Supreme Court: CFPB single-director structure unconstitutional

2020-06-29T18:59:00+01:00By

The U.S. Supreme Court ruled the CFPB’s single-director structure violates the separation of powers between the executive and legislative branches and is unconstitutional.

SEB

Following $107M fine for lax controls, SEB shares AML efforts

2020-06-26T16:52:00+01:00By

Sweden’s financial watchdog was fined SEB $107 million for weak governance practices related to the bank’s anti-money laundering controls in its Baltics subsidiaries.

Volcker

Regs rollback Volcker rule restrictions on bank investments

2020-06-25T20:59:00+01:00By

Despite pushback from some regulators and Democrats in Congress, the newest Volcker rule update will allow banks—in certain circumstances—to invest or sponsor hedge funds and private equity funds.

Accounting fraud

FRC to probe EY, PwC audits of London Capital & Finance

2020-06-24T18:33:00+01:00By

The U.K. Financial Reporting Council has commenced three investigations into the audits of collapsed investment firm London Capital & Finance, including audits carried out by Big Four firms EY and PwC.

Wirecard

Lessons from Wirecard: Ignore unchallenged allegations at your peril

2020-06-24T14:34:00+01:00By

When a company does not rebut serious allegations of wrongdoing with litigation, the only response is to demand answers from the firm or take your business elsewhere, writes financial crime expert Martin Woods.

Deutsche

Deutsche to pay $10.3M for swap data reporting, spoofing practices

2020-06-19T14:39:00+01:00By

Deutsche Bank will pay a total of $10.3 million to resolve two separate CFTC settlements: one for alleged violations of various swap data reporting and other regulatory violations and the other for spoofing practices by two of its traders.

Integrity

From financial crisis to coronavirus: Shifting compliance trends in financial services

2020-06-18T19:43:00+01:00By

Keeping up with regulatory change; budget and resource allocation; and data protection issues were cited as the top three compliance challenges in the financial services industry, according to a recent study.

Commerzbank

FCA fines Commerzbank London $47.4M for AML failures

2020-06-17T16:45:00+01:00By

Commerzbank London will pay a £37.8 million (U.S. $47.4 million) penalty in a settlement with the U.K. Financial Conduct Authority for anti-money laundering systems and controls failures.

SecuritiesRobot

Report: AI tools carry many benefits, some risks for securities industry

2020-06-12T17:55:00+01:00By

A study on the use of artificial intelligence in the securities industry by FINRA found a number of challenges with the technology—data bias, customer privacy, and cyber-security among them—but noted it can offer “significant benefits.”

BankMortgage

FCA fines Lloyds $80M for mistreating mortgage customers

2020-06-12T17:28:00+01:00By

A group of prominent U.K. banks—Lloyds chief among them—is facing a £64 million (U.S. $80 million) fine for unfair treatment of mortgage customers from 2011-2015.

Westpac

Analysis: Let Westpac’s missteps be a cautionary tale

2020-06-12T16:24:00+01:00By

By balking at original allegations, Westpac opened itself to infinitely more harm, writes financial crime expert Martin Woods.

Overcharge

Merrill Lynch to pay $7.2M to customers overcharged for mutual funds

2020-06-11T17:23:00+01:00By

Merrill Lynch will pay more than $7.2 million in restitution and interest to customers who incurred unnecessary sales charges and paid excess fees in connection with mutual fund transactions, FINRA announced.

Danske

Danske faces criminal complaint over market abuse violations

2020-06-11T17:18:00+01:00By

Denmark’s financial regulator has filed a criminal complaint against Danske Bank for violating market abuse regulations concerning inadequate market monitoring and opposite trades.

Westpac

Westpac outlines compliance failures that led to AML breaches

2020-06-05T16:27:00+01:00By

An internal report outlining compliance failures by Australia-based financial institution Westpac that led to 23 million breaches of the country’s AML/CTF laws concluded “a mix of technology and human error” were to blame.

Bank fail

USBI to pay $16M for breaches of fiduciary duty

2020-06-02T19:12:00+01:00By

U.S. Bancorp Investments, a dually registered investment adviser and broker-dealer, has agreed to pay $16 million to settle SEC charges for breaches of fiduciary duty arising out of its mutual fund share-class selection practices.

WellsFargo

Wells Fargo appoints new risk leaders, enhances risk model

2020-06-01T19:04:00+01:00By

Still trying to polish its tarnished reputation, Wells Fargo announced the appointment of two new corporate risk leaders and an enhanced organizational structure “designed to provide greater oversight of all risk-taking activities.”

EY

Investigation into EY’s audit of Danske Bank dropped

2020-06-01T17:40:00+01:00By

Denmark’s state prosecutor has dropped its investigation into whether Big Four firm EY violated anti-money laundering laws in connection with its audit of Danske Bank.

FightingCoronavirus

FinCEN advisory details coronavirus risks for financial industry

2020-05-28T17:00:00+01:00By

The Financial Crimes Enforcement Network has issued what it says is the first of several advisories concerning financial crimes related to the COVID-19 pandemic.