US Deputy Attorney General Yates publishes memo that explains six changes that will take place in FCPA enforcement and investigation. DOJ intends to focus on individuals and will not resolve any related corporate involvement until all related individuals’ cases are resolved. FBI has tripled its International Corruption Unit in order to make this more than lip service. You can read the memo HERE (PDF).
Baby Boomers are targets to securities fraud in Free Meal Seminars. North American Securities Administration Association, association of state securities regulators, warns “senior investors to be aware that a combination of “free lunch” seminars, misleading professional “senior specialist” designations, and abusive sales practices can create a perfect storm for investment fraud. Remember: there’s no such thing as a free lunch.” Read the full warning HERE (PDF).
American Bankers Association released Chip Card Infographic:
Financial services firms have been getting blackmailed by DD4BC (Distributed Denial of Service for Bitcoin). In Q4 2014, there were only 10 reported cases. In Q2 of 2015, there were 83 reported cases. BitCoin is a decentralized currency and transactions can be performed in complete anonymity. The US treats BitCoin as an ordinary asset rather than currency, requiring a gain/loss realization calculation for every transaction, as one would if one sold a painting. While this makes the use of BitCoin cumbersome, it does legitimizes BitCoin. It also means, it is not treated as currency for reporting purposes to the OCC. – Olivia Solon for Bloomberg
For a better, more entertaining explanation of this type of extortion, RadioLab recently published a podcast that explains a similar type of extortion as an introduction to its episode about Darkode, a place on the internet where hackers could buy and sell hacked assets or rent access to hacked networks. – RadioLab
Credit unions might not be filing appropriate SARs and CTRs, says Jennifer Shasky, Director of FinCEN, at National Association of Federal Credit Unions. – Kevin Funnell, BankLawyersBlog.com
Durbin Amendment has had a mixed impact on the costs of accepting debit cards, the retail price of goods and services and restrictions on debit card use. – DoddFrankUpdate.com
FIFA 15, the game on XBox, Play Station and PC, was 15% of EA Sports’ revenue in 2014. FIFA 16 came out this week to great fanfare, now that women’s teams are also on the game. Due to the bribery scandal being investigated by the DOJ, many fans are boycotting the game. EA Sports has sued FIFA in relation to this outcome. This impacts not only FIFA 16, but all future FIFA games by EA Sports. Their contracts lasts through 2022. – Ilya Zlatkin from FCPA Blog
Swiss authorities open criminal proceedings against FIFA president Sepp Blatter – Christopher Elser, Tariq Panja and Hugo Miller at Bloomberg
“During the first half of 2015, FINRA reported $37.5 million in fines from monthly disciplinary actions, compared to the $42.2 million reported in the first half of 2014.” – The Compliance Digest at Quest CE
“… renewed concerns that compliance officers could be blamed for violations committed by others at their companies.” – Matt Rybaltowski at Reuters
FDIC to provide regulatory relief to those affected by fire in California. – FDIC
Jobs In Compliance
- Assistant US Attorney – DOJ, Brooklyn, NY
- Compliance Paralegal – Special Counsel, New York, NY
- Investigations Analyst – ATF, New York, NY
- Privacy Attorney (Temporary) – Insurance Industry (Special Counsel), New York, NY
- Sr Compliance Officer (AML Monitoring) – The Compliance Search Group, New York, NY
- Compliance Officer (Volker Rule) – The Compliance Search Group, New York, NY
- AML & Sanctions Officer – Fidelity, Jersey City, NJ
- Risk Manager – China Trust Bank USA, Los Angeles, CA
I think this is a major issue. Credit Unions are usually smaller than Community Banks, but they offer almost as many products. CU’s face all of the same risks associated with those products, but they tend to have less resources to prevent, deter and investigate money laundering or other financial crimes. With the recent news about the statistical analysis that concluded that Credit Unions are way under-reporting suspicious activity, this issue isn’t likely to go away. Ever since the financial collapse, a lot of people have taken to move their money to CU’s. For good reason. Since these institutions are not profit driven, they are operational efficiency-driven, any excess funds beyond capital funding is returned to depositors. If these depositors are effectively customers and investors, we can assume that when it is convenient for them to be one or the other, they will. In order to pay for acquiring the compliance resources, the CU’s will have to return less money. But if they aren’t returning much money to begin with, then they might still be underfunding compliance programs. For criminals, this situations is perfect. There are several ways to solve for this. One solution would be to centralize the compliance of credit unions. Along with the solution comes the problem of making the credit unions too uniform and, possibly, losing the very efficiency they strive for. Another solution is to subsidize compliance programs. Then the issue becomes the fairness of the subsidy amounts. Another solution would be to close down CU’s that are not meeting the regulatory requirements. This leaves a vacuum in the market, which is also not ideal. But that would force criminals find other ways to finance their activities, and those alternatives aren’t as good, for the most part. All of the solutions have are accompanied by major negatives. I am not leaning toward any one or combination of them. I think, though, the issue of compliance programs at CU’s should be given far more attention than it is receiving.
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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 is a member of ACAMS and ACFE.