The new FinCEN regulations requiring financial institutions to secure beneficial ownership information is fast approaching – May 2018. The US has been way behind in this regulatory area. As a result, money-laundering activity in the US is fairly common. The EU has fast outpaced the US with its 4th Anti-Money Laundering Directive, and with the UK’s initiation of an ownership registry for UK companies. Prosecutors...
A CEO never expects to be wiretapped. Let’s face it – a wiretap in the C-Suite is rare. Justice Department prosecutors have always looked for an opportunity. CEOs have loose lips and can suffer significant damage from recorded conversations. Dutch prosecutors recorded Shell Oil Company’s CEO, Ben van Beurden and his CFO, Simon Henry, in a conversation that implicated Shell in the payment of a...
If you want a reliable indication of a company’s culture, just look at how the company treats employee concerns and whistleblowers. Recent events have highlighted serious failures on the part of major companies to address employee concerns and treat whistleblowers with some degree of respect. Barclay Bank’s CEO was disciplined and suffered financial penalties for his improper attempts to identify a whistleblower who sent an...
We were all aghast at the spectacle on the United Airlines last week when a customer was dragged off a plane when he refused to give up his seat because of an overbooking. No one can underestimate the power of real-time video of controversial incidents. United’s response as reflected in CEO Oscar Munoz’s three separate statements provides a textbook example of how not to handle...
Sanctions enforcement continues to be a significant risk. With the focus on unraveling elaborate corporate ownership schemes, the risk of conducting business with sanctioned individuals or entities is increasing. The Treasury Department’s Office of Foreign Asset Control has increased expectations regarding corporate compliance programs. In addition, OFAC encourages voluntary disclosures when violations occur, and has set out an elaborate scheme regarding transparency. On the criminal...
While reading the independent directors’ report on the Wells Fargo sales incentives scandal, you will be overwhelmed by the feeling of frustration. At the same time, what is described in the report is the extent to which every control function came up against the problem staring them in the face – Wells Fargo’s sales incentive program was out of control. Notwithstanding the 20-20 hindsight pictured...
I am pleased to announce the release by Corporate Compliance Insights of my new e-book: Moving the Goalposts: The Justice Department Redefines Effective Compliance. You can download the book here. Many thanks to the Corporate Compliance Insights Team — Maurice Gilbert, Emily Ellis and Sarah Hadden. They are an incredible team to work with and it is always a pleasure to partner with Corporate Compliance...
In a scathing report (available here), the independent directors at Wells Fargo released their findings and actions based on a comprehensive internal investigation of Wells Fargo’s sales abuses. Based on its findings, Wells Fargo’s independent board took steps to clawback an additional $75 million from former CEO Stumpf and head of Community Banking Carrie Tolstedt for sales abuses resulting from the sales incentives program. The...
The more you learn about Wells Fargo’s culture problems, the more difficult the problems become. But you have to start somewhere, and assuming that Wells Fargo really is committed to addressing the serious problems they face, this will take a long time and a lot of work. Wells Fargo is really at the early stages of a massive remediation project. The board has essentially taken...
Earlier this year, in January 2017, Western Union entered into a Deferred Prosecution Agreement with the Justice Department and the FTC, and agreed to pay $586 in forfeiture to settle anti-money laundering and consumer fraud violations. At the same time, Western Union agreed to pay $184 million in civil monetary penalties for AML violations. The Western Union prosecution sends an important reminder to financial institutions,...
