Financial Institution Fraud

January 15, 2021

Capital One, N.A. will pay a $390 million civil penalty following its admission that it violated the Bank Secrecy Act including by failing to implement and maintain an effective anti-money laundering program, and failing to file thousands of suspicious activity reports (SARs) and currency transaction reports (CTRs) including transactions in its high-risk Check Cashing Group.  As a result, from at least 2008 to 2014, millions of dollars of transactions were unreported, allowing funds connected with organized crime, tax evasion, and other financial crimes to be laundered through the U.S. financial system.  FINCEN

ITG - Securities Fraud violations (Multi-Millions)

Constantine Cannon represented a whistleblower in a submission under the SEC Whistleblower Program relating to brokerage firm ITG's alleged violations of the firm’s dark pool, POSIT.  In May 2021, the SEC awarded our client 30% of the government's recovery, the maximum amount allowed under the program.  Read more -- CC

January 8, 2021

Deutsche Bank Aktiengesellschaft entered into a deferred prosecution agreement and agreed to pay over $130 million to resolve charges that the financial services company violated the FCPA and engaged in a commodities fraud scheme.  The SEC charged that Deutsche Bank made payments to individuals including foreign officials, their relatives, and their associates as third-party intermediaries and consultants to obtain and retain global business, and lacked sufficient internal accounting controls related to the use and payment of such intermediaries, resulting in millions in bribe payments or payments for unknown, undocumented, or unauthorized services that were inaccurately recorded as legitimate business expenses with documentation falsified by Deutsche Bank employees. The agreed payment represents a $79.6 million criminal penalty and $43.3 million in disgorgement in prejudgment interest to the SEC.   Separately, in connection with a spoofing scheme undertaken by Deutsche precious metals traders in New York, Singapore, and London the bank agreed to a total of $7.5 million in criminal penalties, disgorgement, and restitution, the penalty amount of which will be credited against a 2018 $30 million CFTC civil penalty for substantially the same conduct.   SEC; DOJ

January 4, 2021

French bank Union de Banques Arabes et Françaises will pay $8.6 million to resolve an investigation into its operation of U.S. dollar accounts on behalf of Syrian financial institutions subject to U.S. sanctions.  UBAF’s practices allowed the sanctioned entities to conduct transactions through a U.S. bank following internal transfers between the sanctioned entities and non-sanctioned entities that were also UBAF customers.  OFAC

December 22, 2020

Student loan servicer Discover Bank, together with its affiliates the Student Loan Corporation and Discover Products, Inc., will pay a $25 million penalty and at least $10 million in consumer redress to resolve allegations that the bank violated a 2015 Consent Order by failing to provide the consumer redress that order required and by continuing to misrepresent minimum loan payments, and also misrepresenting the amount of interest consumers paid and other material information including interest rates, payments, due dates, and the availability of rewards, among other things.  The CFPB also found additional unfair acts and practices by defendants, including unauthorized payment transfers.  CFPB

December 22, 2020

Santander Consumer USA Inc., which originates and services non-prime auto loans, was found to have violated the Fair Credit Reporting Act by providing erroneous consumer loan information to credit reporting agencies between 2016 and 2019.  A CFPB Consent Order requires the bank to pay a $4.75 million monetary penalty and undertake specific compliance steps.  CFPB

December 17, 2020

Robinhood Financial LLC will pay $65 million to resolve an SEC investigation into its disclosures regarding the firm’s receipt of "payment for order flow" – payments from trading firms for routing customer orders to them – as well as its alleged failure to secure best execution on customer orders.  According to the SEC, while Robinhood advertised to customers that trades were "commission-free," it steered customer orders to trading firms that paid Robinhood for order flow but provided inferior trade prices to Robinhood customers, thereby misrepresenting the true cost of trades.  SEC; See 2021 FINRA penalty

December 9, 2020

ICE Data Pricing & Reference Data LLC agreed to pay $8 million to resolve charges that between 2015 and 2020 it failed to take adequate steps to ensure the accuracy of securities pricing data it supplied to clients, including by relying on single broker quotes which did not reasonably reflect the value of certain securities.  This conduct affected the prices ICE Data PRD provided for more than 40,000 fixed-income securities. SEC