Cyrus Vance, Jr. Kenote

On Monday, January 26, Associations of Certified Anti-Money Laundering Specialists (hereon ACAMS) held its Third Annual AML Risk Management Conference at The Conrad Hotel in downtown New York. Over the course of this week, summaries and takeaways from the key notes and panel discussions will be shared in this blog.

HeaderCyrus Vance, Jr. is the Manhattan District Attorney in the New York county DA’s Office. He is known for a keen focus on financial crimes and crimes where financial services can aid Law Enforcement.

His keynote enumerated five:

  1. Increase in prosecutions of Auditors and Accountants and their firms.
  2. Payday lenders pose a risk to banks and the DA’s office intends to help banks stay out of trouble made by payday lenders.
  3. Non-financial transactions, like credit card verification for hotel reservations, have helped the DA to verify sex traffickers’ activities.
  4. Homegrown terrorism financing is still a risk and financial services play a crucial role is helping the DA’s office collect evidence.
  5. Cyber crime’s boundaries are not national, therefore, the DA’s office has began information sharing partnerships, beginning with London. Paris is interested.

About the Author: Marcus Maltempo is a compliance professional with more than a decade of experience helping banks, law firms and clients manage investigations and regulatory responses.
He tweets @MoneyCompliance

 

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Financial Crime Briefing: Strengthening Controls to Address Evolving Risk Trends

On Monday, January 26, Associations of Certified Anti-Money Laundering Specialists (hereon ACAMS) held its Third Annual AML Risk Management Conference at The Conrad Hotel in downtown New York. Over the course of this week, summaries and takeaways from the key notes and panel discussions will be shared in this blog.

  • William Langford, Moderator, Global Head of Compliance Architecture and Strategy, Citigroup
  • Martin Cunningham, CAMS, Regional Head – Financial Crime Intelligence – Americas, Standard Chartered Bank
  • Justin Bogert, CAMS, Global Controls Manager, Paypal

HeaderThis panel discussion, the final for the conference, was a well-rounded compliance function discussion. Compliance department has a lot of roles: adviser, monitor, surveillance, investigation, risk mitigation, oversight and control, and regulatory relations. The focus of this panel was monitoring, surveillance and investigation. Both Martin Cunningham and Justin Bogert have military intelligence backgrounds. Cunningham is at a traditional financial institution and Bogert is at a money services business (MSB). Many of the issues are the same but the institutions differing in two main ways, in terms of compliance:

  1. MSB’s collect far less information during onboarding a client, and
  2. MSB’s have more issues pertaining to charities being abused for money laundering or terror financing.

Paypal silos risk into three buckets: Brand Risk, Fraud Risk and Transaction Risk. Traditional anti-money laundering program development are utilized to research typology. Special effort is made to collect information as transactions, both financial and non-financial, take place on Paypal’s platform to create risk profiles. Paypal has developed an internal visualization tool to find relationships.

Standard Chartered Bank is highly exposed to developing economies. For this reason, geo-political expertise is highly valued. SCB’s AML teams are made up of four groups of people: Law Enforcement, Intelligence, Bankers and Trade/Tool personnel. Law Enforcement are good at documentation and analysis of the collected information. Intelligence are good at bringing outside information in to provide context. Bankers bring institutional knowledge about how the organization reacts to transactions and relationships. Trade and Tools personnel provide execution expertise in both preventing and investigating crimes.


About the Author: Marcus Maltempo is a compliance professional with more than a decade of experience helping banks, law firms and clients manage investigations and regulatory responses.
He tweets @MoneyCompliance

 

Enhancing the Elements of Your Risk Assessment Methodology

On Monday, January 26, Associations of Certified Anti-Money Laundering Specialists (hereon ACAMS) held its Third Annual AML Risk Management Conference at The Conrad Hotel in downtown New York. Over the course of this week, summaries and takeaways from the key notes and panel discussions will be shared in this blog.

  • Vasilios Chrisos, Moderator, Principal, Fraud Investigation and Dispute Services,  Ernst & Young
  • Richard Small, CAMS, Senior Vice President, Enterprise-Wide AML, Anti-Corruption and International Regulatory Compliance, American Express | Chair, ACAMS Advisory Board
  • Meg Zucker, Global AML Officer, Royal Bank of Canada Capital Markets

HeaderRisk Assessment is key to a successful Compliance Program. This panel discussion talks about the issues surrounding the development, implementation, execution, review and management of the various risk assessments necessary. Here are ten takeaways from this session:

  1. In large financial institutions, multiple risk assessment could be performed on clients for different lines of businesses. Good communication between the two risk assessment programs regarding the same client is key to reducing risk assessment friction, cost overruns, and addressing the uniqueness of each client.
  2. Number of Suspicious Activity Reports (SARs) is not a good measure of the need for additional elements in Risk Assessment because it is not an indicator. however, it might be one of the good places to start for developing the risk assessment when looking for issues.
  3. Lower level executives are still surprised by the requirement to attend compliance training for them, not just for their staff.
  4. Big firms are highly aware of the need for training and compliance since regulators are primarily focused on big firms. It is the medium size firms that might be lacking in Compliance awareness.
  5. Many regulators want to see Audit Reports and Risk Assessments as their starting point in an exam, review or an investigation.
  6. Dealing with businesses within a firm is harder than dealing with AML or Sanctions because businesses often are not as aware of regulatory risks as AML or Sanctions are.
  7. Geographic risks cannot be painted in broad strokes. An example: A client regulated in Hong  Kong is likely very low risk while client in Hong Kong but not regulated are likely very high risk.
  8. Technology is great for efficiency but not always good for developing methodology or for  troubleshooting risks, even for those who are technologically savvy.
  9. Cooperative environment is the best environment for getting cooperation in Risk Assessment, as with anything else. Cooperative environment should be the goal of the whole firm, not just with Compliance.
  10. Regulators are starting to pin down senior leaders to their risk appetite, asking for explicit declarations. Firms generally shy away from this as much as possible.

About the Author: Marcus Maltempo is a compliance professional with more than a decade of experience helping banks, law firms and clients manage investigations and regulatory responses.
He tweets @MoneyCompliance

 

Applying Lessons from Headline-Making Enforcement Actions to Solidify Your Risk Management Strategy

On Monday, January 26, Associations of Certified Anti-Money Laundering Specialists (hereon ACAMS) held its Third Annual AML Risk Management Conference at The Conrad Hotel in downtown New York. Over the course of this week, summaries and takeaways from the key notes and panel discussions will be shared in this blog.

  • Kieran Beer, CAMS, Editor-In-Chief at ACAMS at Moneylaundering.com
  • Arthur Middlemiss, Esq., CAMS, Partner, Lewis Baach Pllc
  • Jonathan Lopez, Partner, Orrick Herrington and Sutcliffe LLP
  • David Szuchman, Executive Assistant Attorney and Chief of Investigation Division, New York County District Attorney’s Office

HeaderThis panel consisted of three present or former prosecutors. Discussion topics ranged from prevention to remediation for both firms and individuals. These topics were discussed under the context of headline grabbing media reports about large banks. Here are ten takeaways:

  1. Three things for firms and individuals to do to show wrongdoing was not criminal: SELF IDENTIFY wrongdoing, SELF REPORT to regulators, and SELF REMEDIATE wrongdoing with either corrections or plan to correct. – Arthur Middlemiss
  2. Firms and individuals must keep up with the news to avoid common inadequacies that are found; it is expected for them.
  3. Risk Assessment programs are a firm’s first and best line of defense against criminal action.
  4. Criminal action against a firm used to be the said firm’s death sentence, but prosecutors have gone out of their way to make sure it isn’t by timing information flow and the market so that the criminal firm’s shareholders do not take a direct hit while firm’s cash takes a direct hit with penalties.
  5. Willful ignorance is the worst defense for an individual both just as a professional and as a defense for wrongdoing. Willful ignorance is part of the crime.
  6. Compliance Officers are asked to bear more professional risk. With it are higher compensation and higher professional risk. Try to avoid the risk from the very beginning, including negotiating during job interviews/offers.
  7. In negotiating a Deferred Prosecution Agreements, don’t over-promise because DPA’s are conditional.
  8. Compliance programs are an affirmative defense. Need to have them, need them to be implemented, and need documentation showing effort to get the rest of the firm involved.
  9. Some offenses lead to investigation and review into other issues. Such are AML-related offenses, which could trigger a review of the bank charter.
  10. Keep in mind that it is difficult to keep a firm out of compliance at the civil level, but there’s no excuse for not figuring out what it takes to keep the firm out of crimes.

About the Author: Marcus Maltempo is a compliance professional with more than a decade of experience helping banks, law firms and clients manage investigations and regulatory responses.
He tweets @MoneyCompliance

 

Managing Regulatory Risk

On Monday, January 26, Associations of Certified Anti-Money Laundering Specialists (hereon ACAMS) held its Third Annual AML Risk Management Conference at The Conrad Hotel in downtown New York. Over the course of this week, summaries and takeaways from the key notes and panel discussions will be shared in this blog.

  • John Byrne, Moderator, Former President of Condor Consulting LLC
  • Jamal El-Hindi, Associate Director, Policy Division, Financial Crimes Enforcement Network (FinCEN), US Department of the Treasury
  • Sarah Green, Senior Director, AML Compliance, Financial Industry Regulatory Authority (FINRA)
  • Denise Reilly, Managing Director, Global Head of BSA/AML Compliance, Citibank
  • James Vivenzio, Senior Counsel for BSA/AML, Office of the Comptroller of the Currency (OCC)

HeaderThis panel discussion covered topics ranging from expectations from regulators, culture of compliance in a firm, and personal liability. The following are  ten takeaways:

  1. Enterprise-wide consistency helps to mange the professionals and reduce gap risk.
  2. Regulators like to see consistency because it shows the effort an institution is putting into trying to be compliant.
  3. Communicate to Boards of Directors that OCC would like to see more focus on compliance from them
  4. Alert Suppression is okay and critical to executing priorities, but the alerts should be logged and revisited to keep the compliance programs up-to-date with the changing environment both ex-firm and intra-firm.
  5. Personal Liability of compliance officers will increase, so, keep good documentation
  6. FINRA does not target individuals, though individuals will face penalties if found willfully unaware or intentionally non-compliant. FINRA focuses on systemic risks to protect investors.
  7. FinCEN does not target individuals, especially trying to avoid dissuading the most talented compliance professionals from fleeing the most difficult problems.
  8. Intra-firm talent development is key to today’s labor market where supply of veteran compliance officers are small compared to demand.
  9. OCC intends to staff lead experts on all exams in the future.
  10. The new OCC Exam Manual, published November 11, 2014, does not have much substantive changes, mostly it is an administrative update to make sure changes to exams since the last major update are documented.

About the Author: Marcus Maltempo is a compliance professional with more than a decade of experience helping banks, law firms and clients manage investigations and regulatory responses.
He tweets @MoneyCompliance

 

Adam Szubin’s Key Note

On Monday, January 26, Associations of Certified Anti-Money Laundering Specialists (hereon ACAMS) held its Third Annual AML Risk Management Conference at The Conrad Hotel in downtown New York. Over the course of this week, summaries and takeaways from the key notes and panel discussions will be shared in this blog.

Adam Szubin is the exiting director of Office of Foreign Assets Control (OFAC) in the Department of Treasury. Soon, he will be the acting under secretary for Terrorism and Financial Intelligence, another office in the Treasury.

HeaderSzubin has a history of speaking at Financial Crimes-related conferences because of his long held position as the director of OFAC. Applauded members of ACAMS for doing their best to make Anti-Money Laundering profession a serious endeavor. Then he alerted to three nuanced risks for the profession.

CUBA was his first concern. As the United States lifts nearly all of its sanctions against the communist island nation this year, it opens up another route for corruption to take place.

RUSSIA was his second concern. OFAC’s Magnitsky Sanctions List enumerates targets explicitly, but not all activities are sanctioned and not all enumerated have been sanctioned the in the same manner. The theme of this sanction is debt and equity financing, or the limit thereof. This is a target on a crucial source of currency for Russia in order for it to succeed. The capital markets have also worked against Russia by lowering the price of oil, the primary source of revenue for Russia. It’s an additional wind behind OFAC’s sanctions.

IRAN was his final enumerated concerns. Even more nuanced than the previous two examples. Iran’s domestic politics indicate the type and length to which the regime is willing to evade western powers to fund terror.

Transparency is the key to successful sanctions compliance. Breach of compliance is often accidental. Finding breaches are difficult because often the breaches are in omnibus accounts. Also global trade cannot stop for complex business areas, like re-insurance of trans-ocean ships.

Because of the human nature of business, financial crimes will occur in some form or another. Professionals Certified Anti-Money Laundering Specialists greatly reduce the efficacy of criminal activities.


About the Author: Marcus Maltempo is a compliance professional with more than a decade of experience helping banks, law firms and clients manage investigations and regulatory responses.
He tweets @MoneyCompliance

 

Three Ways To Becoming A Compliance Professional

For the longest time, compliance officers were people with background in law and audit. These are still very useful ways to get into compliance. Over the past three decade, the regulatory environment for financial services firms have become so complex, compliance officers have started to develop training and credentials more focused on the broadened role their profession has taken. Here are three credentials the industry recognizes.

ACAMS LogoCAMS – Certified Anti-Money Laundering Specialist
A certificate that requires higher education, experience and passing an exam, it addresses the largest work of a compliance department. Additionally, three professional references are required to take the exam. The exam is computerized and takes 3.5 hours. There are 120 question in total. The body of knowledge required to pass the exam includes understanding:

  • how money is laundered,
  • various standards for policies and procedures to combat money laundering,
  • how to develop an anti-money laundering program,
  • how to conduct investigations, and
  • how to interact with regulators.

ACFE LogoCFE – Certified Fraud Examiner
A certificate that requires an undergraduate degree, experience and passing an exam, it cover fraud in all industries, not just financial services. The exam is taken at home or in the office with a Windows based web browser. The candidate has 10 hours to complete and submit the 125-question exam. The body of knowledge required to pass the exam includes understanding of:

  • Financial Transactions,
  • Law,
  • Investigation, and
  • Prevention.

ABA LogoCRCM – Certified Regulatory Compliance Manager
Provided by the American Bankers Association, this certificate requires three years of experience, and exam and a combination of conferences and continuing education credits. The 4-hour exam contains 200 questions and covers the regulatory compliance following topics:

  • Credit
  • Deposit
  • Bank Operations
  • BSA/AML/OFAC
  • CRA
  • Privacy

For all certificates, the profession must maintain membership and participate in continuing education.


About the Author: Marcus Maltempo is a compliance professional with more than a decade of experience helping banks, law firms and clients manage investigations and regulatory responses.
He tweets @MoneyCompliance