Financial Services


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


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


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


Wells Fargo CCO Roemer to depart amid new risk hirings


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.


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


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


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.


Basel Committee seeks comment on principles for operational resilience


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.


OCC fines Capital One $80M over 2019 data breach


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.


Common sense KYC: Customers should supply the knowledge


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.


Firms must apply contact tracing rules to bank relationships


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.


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


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


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.


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


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


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


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.


Goldman Sachs reaches $4B 1MDB settlement with Malaysia


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.


FASB proposes new chapter for financial reporting framework


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


First American first charged with NYDFS cyber-regulation abuses


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


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.


SEC fines UBS $10M over municipal bond offerings


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.


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


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 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.


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.


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.


Analysis: When clean money is used for dirty purposes


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.


What regulators want to know about KYC technology


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.


FinCEN issues advisory on coronavirus-related financial scams


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


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


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


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.


OCC report highlights elevated compliance risks in banking


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.


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


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


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.


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


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.


Regs rollback Volcker rule restrictions on bank investments


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


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.


Lessons from Wirecard: Ignore unchallenged allegations at your peril


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


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.


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


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.


FCA fines Commerzbank London $47.4M for AML failures


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.


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


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.”


FCA fines Lloyds $80M for mistreating mortgage customers


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.


Analysis: Let Westpac’s missteps be a cautionary tale


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


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


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 faces criminal complaint over market abuse violations


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 outlines compliance failures that led to AML breaches


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


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.


Wells Fargo appoints new risk leaders, enhances risk model


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.”


Investigation into EY’s audit of Danske Bank dropped


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.


FinCEN advisory details coronavirus risks for financial industry


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.