Corruption, Crime & Compliance

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The Obvious Partnership — Compliance and Cybersecurity

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21 Feb, 2018

The Obvious Partnership — Compliance and Cybersecurity

Cybersecurity compliance, like the compliance profession, is rapidly growing. The forces pushing cyber compliance are two-fold: the ever-increasing and changing nature of cyber threats and harms, and the logical application of compliance strategies. Compliance has to work closely with in-house corporate information technology. To the extent a company outsources information technology to a cloud provider, compliance will serve an even more important function in coordinating...

US Bancorp Pays $613 Million and Joins the Ranks of AML Violators

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20 Feb, 2018

US Bancorp Pays $613 Million and Joins the Ranks of AML Violators

Prosecutors and regulators are targeting global banks. The beginning of 2018 has seen dominated by enforcement actions of financial institutions – the Federal Reserve’s unprecedented enforcement action against Wells Fargo; Rabobank’s payment of $600 million for significant AML violations; and US Bancorp’s (USB’s) recent $613 million settlement AML violations. (Documents Here). In the latest enforcement action, USB entered into a two-year deferred prosecution agreement (DPA)...

Rabobank Coughs Up $368 Million and Pleads Guilty to Conspiracy to Money Launder and Obstruct Investigation

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19 Feb, 2018

Rabobank Coughs Up $368 Million and Pleads Guilty to Conspiracy to Money Launder and Obstruct Investigation

The Justice Department announced a guilty plea by a subsidiary of Rabobank, a Dutch global bank, to a conspiracy to violate money laundering laws and obstruct a regulatory investigation of Rabobank’s activities in California. (Copy of Plea Agreement Here). Rabobank agreed to pay $368 million in forfeited funds. Rabobank’s settlement follows the deferred prosecution agreement with George Martin, a Rabobank manager in Southern California, who...

Episode 26 — Federal Reserve Blocks Wells Fargo Growth In Response to Governance and Risk Management Disaster

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18 Feb, 2018

Episode 26 — Federal Reserve Blocks Wells Fargo Growth In Response to Governance and Risk Management Disaster

In an unprecedented action, on February 2, 2018, the Federal Reserve restricted Wells Fargo’s ability to grow its business until it implements comprehensive improvements to its board governance and risk and compliance systems. Citing Wells Fargo’s poor record of governance and risk management resulting in the community banking sales incentive scandal and continuing problems at the bank, the Federal Reserve imposed detailed governance and risk...

Planning for the Perilous Consequences of a Data Breach

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14 Feb, 2018

Planning for the Perilous Consequences of a Data Breach

The nightmare scenario for corporate boards and senior executives revolves around the impact of a major data breach. We have seen this first hand with Equifax, Anthem Healthcare, and Target, as prime examples. In the Equifax case alone, it is estimated that approximately 140 million individuals had their information hacked in the attack. It is easy to understand, in these circumstances, that a company can...

The Long Road Back to Redemption: Wells Fargo’s Path to Remediation (Part II of II)

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13 Feb, 2018

The Long Road Back to Redemption: Wells Fargo’s Path to Remediation (Part II of II)

Wells Fargo’s ability to grow its business is on hold for a year while it designs and implements a remediation program to address deficiencies in its board governance, risk management and compliance program. The Federal Reserve’s action blocking Wells Fargo’s growth is perhaps the strongest condemnation of a company’s overall leadership and direction that the government can impose. There is clearly a complete lack of...

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11 Feb, 2018

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Episode 25 — Unraveling the KPMG Audit Scandal

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11 Feb, 2018

Episode 25 — Unraveling the KPMG Audit Scandal

In January 2018, the Department of Justice and the Securities and Exchange Commission announced criminal and civil charges against five KPMG and a Public Company Accounting Oversight Board employee arising from sharing of confidential audit inspection information by PCAOB employees with KPMG audit partners. A sixth defendant, a KPMG official and former PCAOB employee plead guilty and agreed to cooperate with the government investigation. The...

Local Compliance Strategies to Embrace the Business (Part II of II)

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8 Feb, 2018

Local Compliance Strategies to Embrace the Business (Part II of II)

The ultimate success of a global ethics and compliance program often depends on the ability of local compliance officers to engage business operations in a specific country. Of course, a global compliance program’s performance depends on cooperation and coordination at all levels, but in many cases, the ability of a local compliance officer to adopt creative and intelligence strategies to engage the business will establish...