Contact

Click here for a confidential contact or call:

1-212-350-2774

Financial Institution Fraud

This archive displays posts tagged as relevant to fraud by or involving financial institutions. You may also be interested in the following pages:

Page 1 of 31

May 23, 2022

Registered investment advisor BNY Mellon Investment Adviser agreed to pay a $1.5 million penalty to resolve allegations that it misstated or omitted material facts with respect to investment decisions for certain mutual funds in managed.  Specifically, the SEC alleged that BNY Mellon represented or implied that all investments in the funds had undergone a review with respect to Environmental, Social, and Governance (“ESG”) considerations, even though that was not always the case.  SEC

May 20, 2022

Wells Fargo Advisors, which is a registered broker-dealer and investment advisor, agreed to pay $7 million to resolve allegations that it had an inadequate anti-money laundering system.  As a result, the SEC alleged, Wells Fargo did not file timely suspicious activity reports including with respect to foreign wire transfers to or from its customers’ brokerage accounts.  SEC

May 17, 2022

Allianz Global Investors U.S. LLC pleaded guilty to securities fraud and agreed to pay a criminal fine of $2.3 billion, an SEC penalty of $675 million, and over $5 billion in disgorgement and restitution to victims.  Three former AGI senior portfolio managers, Gregoire Tournant, Trevor Taylor, and Stephen Bond-Nelson, also pleaded guilty to related charges and will be sentenced at a later date.  As part of its plea, AGI admitted that between 2014 and 2020, AGI and the individual defendants made false and misleading statements to current and prospective investors in AGI’s Structured Alpha Funds which understated downside risks and overstated the level of independent risk oversight over the funds.  While the funds promised risk management and hedging, the actual investment strategy prioritized returns over risk management, and the promised hedging positions were not purchased.  To conceal losses and understate the magnitude of the actual risks, defendants fraudulently altered numerous financial reports and other information provided to investors.  The scheme was exposed when the funds experienced billions in losses during the 2020 COVID-related market volatility. With its guilty plea, AGI US is disqualified from providing advisory services to U.S.-registered investment funds for the next ten years, and will exit the business of conducting these fund services.  SEC; DOJ; SDNY

May 4, 2022

Bank of America has been ordered to pay a $10 million civil penalty for processing illegal, out-of-state garnishment orders totaling nearly $600,000 against 3,700 customers’ bank accounts beginning in 2011.  According to the CFPB, the bank deceived customers about their rights, imposed unenforceable clauses, and failed to adhere to consumer protections governing customer bank accounts.  As part of the resolution, the nation’s second largest bank must also fix its broken garnishment process and eliminate unenforceable clauses from its contracts.  CFPB

March 17, 2022

USAA Federal Savings Bank will pay $140 million in penalties and admit that it willfully failed to implement and maintain an anti‑money laundering (AML) program that met the requirements of the Bank Secrecy Act, and willfully failed to submit timely and accurate suspicious activity reports.  FinCEN imposed a $140 million penalty, and the bank will receive credit for its payment of a $60 million penalty imposed by the Office of the Comptroller of the Currency (OCC) for related violations. FinCEN; OCC

March 4, 2022

Venture capital fund adviser Alumni Ventures Group, LLC and its CEO Michael Collins have agreed to pay civil penalties totaling $800,000, and have returned $4.8 million to affected funds to resolve claims that they made misleading representations about AVG’s fees, and made inter-fund loans and transfers in violation of the funds’ respective operating agreements.  The SEC alleged that while AVG told customers that its management fee was the “industry standard ‘2 and 20.,” its practice was different from the industry standard in that it assessed the entire 20 percent in management fees – that is, 10 years’ worth of management fees of two percent per annum – upfront at the time an investor made the capital contribution.  SEC

March 3, 2022

City National Rochdale, LLC agreed to a civil penalty just over $30 million to resolve SEC allegations that the registered investment adviser failed to disclose to discretionary account clients that it invested their assets in proprietary mutual funds that generated fees for CNR and its affiliates, rather than in competitor funds whose fees may be lower.  The government also alleged that CNR failed to fully inform certain prospective customers of fees with respect to its proprietary funds.  The disclosure failures resulted in an undisclosed conflict of interest according to the SEC.  SEC

February 24, 2022

The National Bank of Pakistan and its New York branch will pay a total of $55.4 million to resolve investigations by the New York State Department of Financial Services and the Federal Reserve Bank of New York into Bank Secrecy Act/Anti-Money Laundering compliance deficiencies.  The bank had previously entered into agreements with the government entities, acknowledging BSA/AML weaknesses and agreeing to undertake remedial measures.  However, the bank had failed to undertake adequate remedial  measures, as found in examinations by the government entities.  NY DFS; Fed

Top Ten SEC and CFTC Recoveries of 2021

Posted  01/7/22
Top Ten Sign with Letters
As we recently detailed, 2021 proved to be a blockbuster year for whistleblowers under the CFTC and SEC Whistleblower ProgramsSeven of the ten largest whistleblower awards of 2021 were made to SEC and CFTC whistleblowers, including a massive $200 million CFTC award that was roughly twice as large as all prior CFTC awards combined.  In total, the SEC paid more awards—both in total dollars and individual...

Top Ten Whistleblower Awards of 2021

Posted  01/6/22
Red Whistle with People
2021 was another banner year for whistleblowers, who once again collectively recovered billions of dollars for the government and hundreds of millions of dollars in whistleblower rewards under the various government whistleblower programs.  This includes awards under the qui tam provisions of the federal False Claims Act and various state False Claims Act programs.  It includes awards under the Dodd-Frank SEC...
1 2 3 31