Broker-dealer Banca IMI Securities Corp. pleaded guilty to criminal antitrust charges arising from a conspiracy to rig bids to borrow pre-release American Depository Receipts (ADRs) from one of the depository banks permitted to create ADRs. The depository bank instituted an auction process for pre-release ADRs, and Banca IMI conspired with others to submit artificially low, sometimes identical, bids, to the bank. Banca IMI will pay a criminal fine of $2 million. DOJ
Constantine Cannon Attorneys Eric Havian and Michael Ronickher Published on Need for Whistleblowers in Anti-Money Laundering Enforcement
With a whistleblower program for anti-money laundering enforcement currently under discussion in the House of Representatives Financial Services subcommittee, Constantine Cannon attorneys Eric Havian and Michael Ronickher were published in Banking Exchange on April 22 on the benefits such a program could bring. Highlighting the example of the recent Standard Chartered settlement, in which the London-based bank agreed...
Online lending company, Avant, LLC, will pay $3.85 million to settle FTC charges for deceptive loan servicing practices and for misleading its consumers. Allegedly, Avant made unauthorized charges on consumers’ accounts and unlawfully required consumers to agree to automatic payments from their bank accounts. Avant has also been charged with failing to give consumers accurate payoff quotes or timely credit payments made by check. In addition to the monetary sanctions, under the settlement, Avant will be prohibited from taking unauthorized payments or collecting payment by means of remotely created check (RCC). FTC
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
Merrill Lynch agreed to pay $8 million to settle charges by the SEC that it improperly borrowed ADRs from other brokers when it knew that these other brokers did not own the foreign shares needed to support the pre-released ADRs. This practice artificially inflates the number of securities that are tradeable for a foreign issuer. SEC
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.