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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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Top Ten Federal Financial Fraud Recoveries of 2018

Posted  01/25/19
Wooden gavel and handcuffs on top of U.S. currency
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...

January 2, 2019

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

December 28, 2018

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.

December 26, 2018

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

December 21, 2018

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

December 18, 2018

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

December 17, 2018

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.

December 17, 2018

Bank of New York Mellon has agreed to pay more than $54 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 BNY Mellon 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

Constantine Cannon Attorneys Eric Havian and Michael Ronickher Published in Law360 on the Need for Anti-Money Laundering Whistleblower Rewards

Posted  12/12/18
In the wake of anti-money laundering enforcement activity spurred by the Panama Papers, Constantine Cannon attorneys Eric Havian and Michael Ronickher published an article in Law360 on why we need an anti-money laundering whistleblower program. Havian and Ronickher argue for a new, DOJ-led whistleblower program to close the “large enforcement gap” left open by the existing IRS and SEC programs: “Domestic law...

Money Laundering Watch: Will More Chickens Come Home to Roost Following Deutsche Bank Raid?

Posted  11/30/18
The Panama Papers fallout continues with a massive early morning raid on Deutsche Bank headquarters in Frankfurt, Germany. Some 170 officers searched for evidence of the bank’s role in over $350m worth of suspected money-laundering through organizations in the British Virgin Islands. Deutsche Bank confirms the investigation is related to the Panama Papers: the April 2016 release of over 11 million files about...
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