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Enhanced Due Diligence on Potential Clients is Increasing in Importance for Law Firms

September 29, 2022 | Due Diligence Financial Crime Consulting

Regulatory trends and high-profile investigations suggest that law firms should conduct enhanced due diligence background checks on all potential clients as part of standard risk management and compliance protocols.  

The U.S. House of Representatives recently passed anti-money laundering legislation that would require law firms (in addition to accountancies, payment service providers, and trust companies) to report suspicious transactions by clients, as banks already must do. 

Despite industry push back and arguments by some that the affirmative reporting obligations would negatively Read More

The Looming Bear Market is Likely to Bring More Prosecutions

June 23, 2022 | Financial Crime Consulting

When the tide goes out, as it appears to be doing now with the market down 20% percent from its highs in January, bad actors will be left exposed for everyone to see. Simply put, as the market drops those companies hiding behind lofty share prices and astronomical crypto values will be scrutinized to determine if financial fraud and white-collar crime was behind this activity.

The Department of Justice recently brought two significant, complex cases that illustrate this point when … Read More

With Enforcement Actions Likely to Increase in 2022, Companies Should Ask Where the Bodies are Buried

February 14, 2022 | Compliance Financial Crime Consulting

In 2022, companies are likely to see an increase in white collar and regulatory investigations and enforcement actions. Here are just a few reasons why this is likely to happen. First, in the late fall, Deputy Attorney General Lisa Monaco indicated that the Justice Department would bring a renewed focus on corporate crime and that the Department was “going to find ways to surge resources” to its prosecutors. In January, another senior Justice Department official, Nicholas McQuaid, said at a … Read More

Payoneer OFAC Settlement Provides Direction for Fintech Compliance Officers

October 14, 2021 | Financial Crime Consulting test

The regulatory landscape for fintechs is continually evolving. It is critical that compliance officers stay on top of what is going on in the industry to ensure they make the best decisions and take proactive measures in alignment with current regulations. The recent OFAC settlement with Payoneer, Inc. for apparent violations of multiple sanctions programs is an excellent case study for compliance officers with fintechs and payment processors to heed when enhancing their compliance programs.

For those not familiar with … Read More

FinCEN’s Assessment on the Use of No-Action Letters—What Happens Next?

July 26, 2021 | Financial Crime Consulting

On June 30, 2021, the Financial Crimes Enforcement Network (“FinCEN”) finished an assessment of whether it should create a process for issuing no-action letters in connection with the Bank Secrecy Act (“BSA”) and other anti-money laundering and countering the financing of terrorism (“AML/CFT”) laws and regulations. The short answer is Yes—FinCEN has concluded that a no-action letter process would be valuable, and the agency will be taking steps towards a rulemaking.

A no-action letter is a letter from an agency … Read More

5 Tips to Best Position Your Fintech for a Banking Charter License Application

March 23, 2021 | Financial Crime Consulting Risk + Compliance

5 tips for fintechs applying for a banking charter licenseRecently, several financial technology (“Fintech”) organizations have applied for – and been granted – banking charter licenses. For example, in May 2019, Grasshopper was approved for a charter issued by the Office of the Comptroller of the Currency, while in July 2020, Varo Money was approved for a national bank charter.

As mentioned in an earlier post, in March, Square, Inc. (“Square”) announced that it had commenced banking operations under its independently governed subsidiary industrial bank, Square Financial Services … Read More

The Unique Advantages Fintechs Have When Expanding into Banking Operations – A Trend is Underway

March 12, 2021 | Financial Crime Consulting Risk + Compliance

In 2021, Square, Inc. (“Square”) announced that it had commenced banking operations under its independently governed subsidiary industrial bank, Square Financial Services (“Square Financial”). The announcement comes after Square successfully completed the charter approval process with the Federal Deposit Insurance Corporation (“FDIC”) and the Utah Department of Financial Institutions for an Industrial Bank/Industrial Loan Corporation (“ILC”) license. Square Financial will offer business loan and deposit products, beginning with underwriting and originating business loans for Square’s existing sellers who use its … Read More

Bank Secrecy Act Modernization Likely to Increase BSA/AML Enforcement, Including From Larger Whistleblowing Awards

January 13, 2021 | Financial Crime Consulting

2020 saw a substantial amount of enforcement activity in the BSA/AML/OFAC area.   Even prior to last month’s enactment of the Anti-Money Laundering Act of 2020 (the “2020 AMLA”), conventional wisdom favored an increase in enforcement activity by regulators and prosecutors for violations of laws in these areas under the incoming Biden Administration. [See Division F]

The 2020 AMLA just gave this area of enforcement a significant shot in the arm.  In an era where federal legislation has become … Read More

Received a World Bank Audit Letter? Here’s What to Do.

November 11, 2020 | Compliance Financial Crime Consulting

In its recently issued Sanctions Systems Annual Report FY 2020, the World Bank Group (WBG) confirmed its commitment to investigate and sanction corruption and fraud occurring in bank-financed projects, despite the unprecedented challenges of the COVID-19 pandemic.  The report, co-authored by the Integrity Vice Presidency (INT), the Office of Suspension and Debarment (OSD), and the Sanctions Board, revealed little coronavirus-related slowdown in the WBG’s enforcement activities.  To the contrary, the bank’s in-house investigatory teams initiated roughly the same number of … Read More

Evolution of the NYDFS Virtual Currency Licensing Regime

July 23, 2020 | Compliance Financial Crime Consulting

In the Summer of 2015, the New York State Department of Financial Services (“DFS”) became the first state banking regulator to issue a stand-alone virtual currency regulatory framework (23 NYCRR Part 200).  Prior to the creation of this virtual currency license, also known as the “Bitlicense,” institutions followed different paths to seek approval from the DFS for their crypto-related activities involving New York or New York residents.  Some institutions, like Paxos Trust Company, LLC (f/k/a itBit Trust Company, LLC) and … Read More