Munich-based UniCredit Bank AG (UCB AG) and affiliated entities have agreed to pay more than $1.3 billion to resolve criminal charges and related allegations of unlawful conduct by the Department of Justice, Department of Treasury Office of Foreign Assets Control (OFAC), the Federal Reserve, the New York Department of Financial Services, and the New York County District Attorney's Office. As part of the settlement, UniCredit admitted that between 2002 and 2011 it processed financial transactions worth hundreds of millions of dollars through U.S. financial institutions on behalf of the Islamic Republic of Iran Shipping Lines and other entities subject to sanctions under the International Emergency Economic Powers Act (IEEPA). DOJ; Treasury; Fed; DANY
London-based Standard Chartered Bank has agreed to pay $1.1 billion to resolve criminal charges and related allegations of unlawful conduct by the Department of Treasury Office of Foreign Assets Control (OFAC), the Federal Reserve, the New York Department of Financial Services, the New York County District Attorney's Office, and the United Kingdom's Financial Conduct Authority. As part of the settlement, Standard Chartered admitted that it processed thousands of financial transactions worth hundreds of millions of dollars through U.S. financial institutions for the benefit of Iranian and other entities and individuals subject to sanctions. In addition, Standard Chartered admitted that it had deficiencies in its compliance programs and had falsified the records of New York financial institutions. In addition to the financial penalties, Standard Chartered agreed to the extension of an existing deferred prosecution agreement through 2021, and committed to undertaking specified compliance initiatives. DOJ; Treasury; Fed; DANY; UK
Wedbush Securities, Inc., will pay a $250,000 penalty to resolve an SEC investigation into an alleged failure to supervise its representatives. Wedbush allegedly ignored evidence that one of its representatives was engaged in a pump-and-dump scheme targeting retail investors. Wedbush also agreed to undertake specified remedial measures. SEC
Top Ten Federal Financial Fraud Recoveries of 2018
While 2018 has been a banner year for FCPA, Tax, and SEC & CFTC recoveries, in the bottomless pit of financial frauds that hurt taxpayers, the government, consumers, investors, and the American economy, 2018 brought us additional stunning recoveries for violations related to residential-mortgage backed securities, international economic sanctions, consumer protection, anti-money-laundering, EB-5 investment fraud, and...
Wells Fargo will pay a $10 million penalty to the California Department of Insurance to resolve allegations that Wells Fargo signed approximately 1,500 customers up for insurance without their consent. Wells Fargo also agreed to exit the personal insurance business. CA
Wells Fargo reached a settlement valued at $575 million with the 50 states and District of Columbia to resolve state investigations into Wells Fargo's practice of opening accounts for customers without authorization. The state settlement is in addition to a $1 billion CFPB/OCC settlement regarding the same conduct. The settlement will be divided among the states. See, e.g., CA; FL; GA; IL; NJ; PA.
JPMorgan Chase Bank N.A. has agreed to pay more than $135 million to settle charges that it improperly handled “pre-released” American Depositary Receipts (ADRs). ADRs are securities that represent shares in a foreign company, and ordinarily require that a corresponding number of foreign shares be held at a depository bank. However, “pre-release” allows ADRs to be issued without the deposit of foreign shares, provided that brokers have an agreement with a depository bank and the broker or its customer owns the required number of foreign shares. The SEC found that JPMorgan improperly provided ADRs to brokers when, in fact, neither the broker nor its customer had the foreign shares needed to support those new ADRs, a practice which can result in inappropriate short selling and dividend arbitrage. SEC
40 states have entered in to a $68 million settlement with UBS for its fraudulent conduct in the manipulation of the London Interbank Offered Rate (LIBOR). The manipulation resulted in the government entities paying inflated prices for swaps and other financial instruments that were linked to LIBOR. Governmental entities with LIBOR-linked swaps and other LIBOR-linked financial instruments with UBS will be notified if they are eligible to receive a distribution from the settlement fund. See: CA AG; CT AG; FL AG; NJ AG; NY AG; PA AG
The New York Department of Financial Services has imposed a $15 million fine on Barclays Bank PLC based on efforts by the bank and its CEO, Jess Staley, to identify an anonymous whistleblower within the organization, in contravention of the bank's whistleblower policies. NY
UBS Financial Services Inc. has agreed to pay a $5 million penalty to the SEC, and a $10 million penalty to the U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN) and Financial Industry Regulatory Authority (FINRA), to resolve claims that it failed to file required Suspicious Activity Reports (SARs) for transactions suspected to involve fraud or with no apparent lawful purpose.