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The SEC (Sort of) Weighs In on How Personal Liability for Chief Compliance Officers May Undercut Effective Compliance Programs

December 14, 2020 | Compliance Risk + Compliance

Although regulators often seek to empower compliance officers within their institutions, a troubling question lingers as to whether regulators are undercutting this important message by simultaneously sending mixed or unrefined signals about when a Chief Compliance Officer should be held personally liable for the compliance failings of his or her firm. The director of the U.S. Securities and Exchange Commission’s Office of Compliance Inspections and Examinations recently urged investment firms to empower Chief Compliance Officers (CCOs), saying, “The CCO is … Read More

When to Consider CFIUS Mitigation Requirements? Now!

September 17, 2020 | Compliance

As my colleague Ken Mendelson noted, the watchword for ACI’s recent CFIUS conference was “mitigation.”  As a result of the new rules implementing the Foreign Investment Risk Review Modernization Act (“FIRRMA”), the number of deals requiring mitigation is likely to grow significantly.

The conference, however, focused mostly on the kinds of deals that would require mitigation.  The conference offered little detail regarding the specific mitigation measures that might be sufficient to get a transaction approved.  Those measures could … Read More

More CARES Act Investigations Should Come as No Surprise

September 14, 2020 | Compliance

As might have been expected, the urgent distribution of hundreds of billions of dollars by the government in coronavirus relief funds has strained the capacity to process it and left ample fodder for further government oversight and investigations.  Anyone who received this funding or was involved in the process to distribute it should assess their potential exposure and be prepared when the government knocks at the door.

The strain is evidenced by developments reported over the last couple of weeks.  … Read More

Evolution of the NYDFS Virtual Currency Licensing Regime

July 23, 2020 | Compliance

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

Deutsche Bank Sanctioned in Connection with Jeffrey Epstein Banking Relationship

July 9, 2020 | Compliance

The New York Department of Financial Services (“NYDFS”) recently sanctioned Deutsche Bank (“DB”) $150 million for BSA/AML deficiencies.  According to the regulator’s factual findings, the compliance failures arose in connection with the bank’s private wealth relationship with Jeffrey Epstein, and correspondent banking relationships with Danske Bank Estonia (“Danske Estonia”) and FBME Bank (“FBME”), both located in Eastern Europe.

This latest enforcement action against DB follows several others issued against the bank by NYDFS since 2015, including for improper conduct arising … Read More

COVID-19 Pandemic Oversight is Heating Up

June 11, 2020 | Compliance

Oversight of congressional funding and the economic impact of the COVID-19 pandemic picked up steam this week. Anyone who received funding from the CARES Act or other disaster relief legislation needs to be sure the money can be properly accounted for.

The Senate recently confirmed Brian Miller as Special Inspector General for Pandemic Recovery (SIGPR).  As SIGPR, he will oversee the taxpayer-funded pandemic recovery fund and lead audits and investigations to prevent and detect fraud and abuse. Miller will also … Read More

COVID-19: CARES Act and False Claims Act Compliance

June 10, 2020 | Compliance

The COVID-19 pandemic has left us all in an embattled state, and the businesses that fuel our economy have probably been hit hardest of all. In an effort to help mitigate the damage, the government is funneling $2.2 trillion to hard-hit companies via the CARES Act (Coronavirus Aid, Relief, and Economic Security Act). While the potential is always high for fraud and abuse in relation to large, cumbersome governmental actions, this is never truer than when they are precipitated by … Read More

On the Front Line, Banks Must Protect U.S. Taxpayer Money from Fraud

May 7, 2020 | Compliance

Congress passed stimulus bills to provide emergency relief to individuals and businesses adversely impacted by the COVID-19 pandemic crisis. Banks have already exhausted the first $350 billion in loans to small businesses through the Paycheck Protection Program (“PPP”) and are working on lending an additional $320 billion. With this much money going out the proverbial door, surely a large number of frauds will follow, especially if the gate keepers — banks — don’t keep watch.

Under the PPP, eligible banks … Read More

As Regulators Continue to Provide Guidance During These Unprecedented Times, Some is Easier to Interpret Than Others – A Focus on OFAC

May 6, 2020 | Compliance

Various regulators have recognized in guidance, press releases, and the like, that financial institutions and other corporations may need to adjust some or all of their compliance operations to handle the challenges posed by the COVID-19 pandemic.  Some guidance is easier to interpret and adhere to than others.  Examination timing and logistics continue to be adjusted on a case by case basis and firms have been working directly with their primary regulators to make appropriate adjustments as needed.  Some guidance … Read More

Post-COVID-19 Investigations and Healthcare Fraud

May 4, 2020 | Compliance

As we continue to work through the new world of COVID-19, it’s important not to lose sight of what is almost certainly on the horizon – post-COVID investigations. The federal government has poured trillions into not only containment and treatment, but also financial stimulus. In order to facilitate greater flexibility for healthcare providers attending to the onslaught of pandemic-related needs, the feds are waiving certain requirements. Nevertheless, healthcare facilities should be implementing careful compliance practices to help avoid potential claims … Read More