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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:

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August 14, 2023

UBS AG has agreed to pay $1.4 billion to settle a DOJ investigation alleging the financial institution and its U.S.-based affiliates defrauded investors by making false and misleading statements regarding its residential mortgage-backed securities (RMBS), which it knew largely did not hold up to loan underwriting guidelines and consumer protection laws.  During the 2008 financial crisis, 40 RMBS that UBS issued in 2006 and 2007 ultimately tanked, causing substantial losses to investors.  This settlement is the last case brought by a DOJ working group focused on failed RMBS that led to the crisis.  DOJ

August 10, 2023

Colombian financial services institution Corporación Financiera Colombiana S.A. (Corficolombiana) has agreed to pay over $80 million to resolve foreign bribery investigations by criminal, civil, and administrative authorities in the United States and Colombia.  Between 2012 and 2015, Corficolombiana allegedly conspired with Brazilian-based construction conglomerate Odebrecht S.A. (Odebrecht) to offer and pay more than $20 million in bribes to Colombian government officials in order to win rights to construct and operate a 328-mile toll road.  As a result, Corficolombiana earned more than $28 million in profits.  Now, in addition to the financial penalties that it will pay—which will be divided between DOJ and SEC—the company will be subject to a three-year deferred prosecution agreement with DOJ.  DOJ; SEC

August 8, 2023

BNP Paribas, Société Générale, Wells Fargo, and Bank of Montreal have been ordered to pay a combined $260 million for violating CFTC rules around recordkeeping and supervision.  Separately, two of those institutions, BNP Paribas and Wells Fargo, along with BMO Capital Markets Corp., Houlihan Lokey Capital, Inc., Mizuho Securities USA LLC, Moelis & Company LLC, SMBC Nikko Securities America, Inc., and Wedbush Securities Inc., have agreed to pay a combined $289 million for violating similar SEC rules.  The financial institutions were found to have failed to maintain, preserve, or produce communications sent via unapproved channels, such as personal texts.  With this enforcement action, the CFTC has recovered over $1 billion from actions against 18 financial institutions for similar charges, while the SEC has recovered over $1.5 billion from actions against 30 financial institutions.  CFTC, SEC

Bank of America to Pay $250 Million over Junk Fees and Fake Accounts

Posted  07/13/23
Bank of America Sign
Government regulators this week ordered Bank of America to pay $250 million for engaging in a string of illegal banking practices that harmed hundreds of thousands of consumers. The Consumer Financial Protection Bureau (CFPB) accused Bank of America of double-dipping on junk fees, withholding promised credit card rewards, and opening fake credit card accounts. The Office of the Comptroller of the Currency (OCC)...

July 11, 2023

Bank of America has been ordered to pay more than $100 million to harmed consumers, $90 million in penalties to the Consumer Financial Protection Bureau (CFPB), and $60 million in penalties to the Office of the Comptroller of the Currency (OCC) for multiple acts of misconduct.  The bank was found to charge consumers double fees on insufficient funds, withhold promised cash and point rewards on credit cards, and illegally obtain and use consumer credit reports without their approval.  CFPB

Constantine Cannon's Liz Soltan Featured in The Hill Discusses Protecting FinCEN Whistleblowers

Posted  06/16/23
Capital Building Zoomed in on 50 Dollar Bill
Constantine Cannon Whistleblower associate Elizabeth “Liz” Soltan is featured in The Hill with an op-ed on remuneration for whistleblowers under the Financial Crimes Enforcement Network (FinCEN) whistleblower program.  FinCEN whistleblowers help fight money laundering and sanctions evasion. The FinCEN program is in its early days and has not published regulations. It may be modeled on the Securities and...

May 31, 2023

One of the largest non-depository personal installment lenders in the country, OneMain Financial, has been ordered to pay $20 million in penalties and restitution for tricking borrowers into signing up for optional products and failing to refund interest on purchases they claimed were fully refundable.  As part of the settlement, OneMain was also ordered to adjust its cancellation policies.  CFPB

May 30, 2023

The former head of Wells Fargo’s Community Bank, Carrie Tolstedt, has agreed to pay a $3 million penalty to settle charges of misleading investors about its financial success.  Over a two-year period, Tolstedt publicly and repeatedly touted a metric used by Wells Fargo to measure financial success, even though she knew it did not accurately track accounts or products used or needed by customers.  In addition to the penalty, Tolstedt will pay almost $1.5 million in disgorgement and over $400,000 in pre-judgment interest.  The funds will be combined with prior payments of $500 million by Wells Fargo and $2.5 million by its former CEO and Chairman, John Stumpf, and will be distributed to harmed investors.  SEC

May 23, 2023

Rhode Island-based Citizens Bank, one of the 15 largest banks in the country, has agreed to pay a $9 million fine to the CFPB’s victim relief fund in order to resolve allegations of violating consumer financial protection laws.  Citizens Bank allegedly failed to inform consumers of the status of disputed credit card charges, failed to investigate claims of unauthorized charges, and failed to issue refunds for fees arising from the charges.  CFPB

May 12, 2023

HSBC Bank USA, N.A. has been ordered to pay $45 million to settle charges involving a number of violations of the Commodity Exchange Act.  Over an eight-year period beginning in 2012, HSBC traders systematically structured their trading to move the market prices of issuer swaps in a direction that was favorable to HSBC and unfavorable to its counterparties.  Over several months beginning in 2015, HSBC’s supervisor for its U.S. dollar swap desk repeatedly engaged in spoofing.  Lastly, over a couple months beginning in 2020, HSBC failed to make or keep recordings of mobile phone calls involving swap transactions.  CFTC
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