Tagged: AML

FINRA Fines BNP Paribas $15 Million for Anti-money Laundering Violations

The Financial Industry Regulatory Authority is not known for its aggressive enforcement record.  But that may be changing. FINRA recently fined BNP Paribas for $15 million for anti-money laundering deficiencies in the broker-dealer unit’s operations that allowed billions of dollars’ worth of suspicious penny stock and foreign currency transactions. BNP’s senior management failed to respond to repeated warnings from staff that the firm’s minimal AML...

UBS Pays $15 Million for AML Compliance Deficiencies

UBS Group agreed to pay a combined $15 million penalty to the US Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”)and the SEC for regulatory deficiencies in its anti-money laundering compliance program.  UBS is required to pay $5 million to the Treasury Department; $5 million to the SEC and another $5 million to FinCEN. UBS’ broker-dealer unit, UBS Financial Services, Inc. (“UBSFS”), violated the Bank Secrecy...

Dig a Little Deeper: The Importance of Beneficial Ownership

Companies interact with a large number of entities in the outside world – customers, third party intermediaries and vendors and suppliers to name the most significant ones. These relationships are the lifeblood of a company. In today’s world, companies have to know with whom they are dealing – not just the name of the company, not just the officers of the company, but the natural...

Customer Due Diligence in the Post-Panama Papers Era

Sometimes it takes a scandal to advance a policy or law enforcement cause. The Panama Papers scandal has given new life to financial regulators around the world who seek to impose customer due diligence requirements on banks and other key players in the financial industry. Knowing Your Customer is not only a basic requirement but is fast becoming a potential enforcement nightmare. In this era,...

FinCEN Expands Crackdown on Real Estate Buyers

Building on early successes, the Financial Crimes Enforcement Network (“FinCEN”) announced new rules targeting buyers of high-end real estate properties.  (Here). Earlier this year, FinCEN adopted rules focusing on high-end buyers of real estate in Miami and New York City. The new rules required title companies to report the beneficial owners of limited liability companies and shell companies which use cash to purchase high-end real...

New York Department of Financial Services Issues New AML and Sanctions Regulations

The New York DFS finalized its new AML and Sanctions screening regulations. Interestingly, the NYDFS backed off its original proposal to require a Chief Compliance Officer to certify to a compliance “finding” that the bank or other covered entities maintain an adequate AML and sanctions compliance program. In its place, the NYDFS regulations require an annual certification from senior management, i.e. those responsible for “management,...

Addressing AML Risks in the Era of Aggressive Enforcement

The resurgence in anti-money laundering enforcement in the last few years reflects the overall improvement in the banking industry and recovery from the financial collapse. Federal prosecutors and regulators have renewed their interest in AML compliance lapses, particularly in the area of sanctions/OFAC violations. FinCEN, the primary regulatory agency responsible for enforcement, has both diversified its targets and increased its enforcement efforts. For years, FinCEN...

AML Risks and Foreign Correspondent Banking

With the Panama Papers scandal and government promises of continued aggressive AML enforcement, financial institutions face a variety of risks that require increased vigilance and mitigation strategies. One of the most challenging risks facing all financial institutions is foreign correspondent banking. In essence, a foreign correspondent banking relationship is built on the effectiveness of a foreign bank’s AML compliance program and ongoing monitoring capabilities. Such...

FinCEN Issues New Beneficial Ownership Regulations

Under the dark cover of the Panama Papers scandal, FinCEN moved quickly to issue its beneficial; ownership regulations. For all of the US regulatory and financial industry bluster, it is about time. The United States stands far behind other countries in requiring transparency with regard to financial ownership. It is unfortunate that it took the Panama Papers scandal to give FinCEN the political opportunity to...

Panama Papers: Prosecutors Launch Investigations

When a scandal hits the media like the Panama Papers leak of 11.5 million confidential legal records, we all know what to expect. Criminal investigations, regulatory responses, and of course, congressional hearings of some sort so that everyone gets a piece of the scandal pie. The International Consortium of Investigative Journalists (“ICIJ”) reported the leak of 11.5 million confidential legal records designed to expose shell...