LEGAL
News & Views
The New Paradigm: Proposed reforms of the AML/CFT regime by The Clearing House
Earlier this year, The Clearing House Association, a banking association and payments company that is owned by some of the largest commercial banks and dates back to 1853, published a paper titled A New Paradigm: Redesigning the U.S. AML/CFT Framework to Protect National Security and Aid Law Enforcement. The paper, a product of two closed-door symposia that convened approximately 60 leading experts in the field of AML/CFT, analyzes the effectiveness of the current AML and Combating the Financing of Terrorism (CFT) regime, identifies problems with that regime, and proposes a series of reforms to remedy them. This interview between Greg Baer, president of The Clearing House, and expert lawyers from the law firm, Ballard Spahr, discusses findings of the paper and the future of AML/CFT.
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DLA Piper’s 2017 Global Compliance & Risk Report: Compliance Grows Up
Improvements to compliance programs, likely combined with recent political changes, are helping to reduce compliance executives’ concerns about personal liability. At the same time, the compliance function is becoming more independent and prominent in large organizations worldwide – though there remains significant room for improvement, especially in compliance’s relationship with boards of directors. Read about these and more top findings in DLA Piper’s 2017 Global Compliance & Risk Report.
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MoneyGram CCO’s temporary employment bar and penalty offer lessons
The former chief compliance officer for MoneyGram International agreed to a three-year injunction barring him from performing a compliance function for any money transmitter and to pay a $250,000 penalty for anti-money laundering (AML) failures – one of the largest fines ever imposed by FinCEN on an individual. The case represents a telling push by the U.S. government to impose personal liability on compliance professionals over corporate-wide shortfalls, and the government’s pursuit of the case is a strongly worded message to the compliance industry.
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HSBC partners with AI startup to combat money laundering
HSBC is implementing Ayasdi Inc’s AI technology to automate anti-money laundering investigations that have traditionally been conducted by thousands of humans. The vast majority of anti-money laundering investigations at banks do not find suspicious activity, resulting in a waste of resources. In a pilot of Ayasdi’s technology, HSBC saw the number of investigations drop by 20 percent without reducing the number of cases referred for more scrutiny.
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Banking law trends and developments
Faced with a multitude of legal and regulatory issues, including those arising from innovations in technology, as well as talk of a government scale-back of the regulatory burden on the financial industry, banks and their counsel must be aware of recent trends and developments to mitigate new risks effectively.
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How Reuters analyzed the data FINRA doesn’t want you to see
FINRA requires brokers to disclose 23 types of incidents that might give investors concern, such as regulatory sanctions, lawsuit judgments, and bankruptcies. The regulator then publishes those disclosures on its BrokerCheck website, allowing investors to search the backgrounds of individual investment advisors, but FINRA refuses to release that data in bulk form. Reuters obtained that bulk FINRA data from researchers at Columbia University Law School Data Lab, and examined firms with at least 20 brokers and FINRA-mandated disclosures. They found 48 firms where at least 30 percent of brokers have such FINRA flags on their records.
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