FinCEN’s $1 Million Fine Against CCO and Personal Liability

Posted by on Dec 4, 2015 in AML, CCO Liability | 0 comments

FinCEN’s $1 Million Fine Against CCO and Personal Liability

Written by Don Lee In December of 2014, FINCEN fined MoneyGram’s then Chief Compliance Officer Thomas Haider $1 Million as a civil penalty and was trying to bar him from working in the financial services industry for life (https://www.fincen.gov/news_room/nr/pdf/20141218.pdf). This stems from fraudulent actions by Haider’s employer MoneyGram in a $128 Million telemarketing fraud scheme. Haider  was accused of “failing to ensure that his company abided by the anti-money laundering provisions of the Bank Secrecy Act.”...

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OFAC Enforcement and the monitoring of IP addresses

Posted by on Nov 24, 2015 in AML | 0 comments

OFAC Enforcement and the monitoring of IP addresses

Written by Don Lee I read through OFAC’s Enforcement Information for November (https://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20151124_Barracuda.pdf) and found this interesting and a different twist to OFAC regulations from what I’m used to seeing. OFAC fined Barracuda Networks for violating sanctions against Iran, Sudan, and Syria for the sale and distribution of its products to persons in these nations. For those of you that have not used Barracuda’s services, they provide email filtering content...

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Do you have a Risk Based Program?

Posted by on Nov 19, 2015 in AML, CCO Liability, Compliance Automation, Risk Rating | 0 comments

Do you have a Risk Based Program?

Written by Don Lee The first question regulators often ask during an initial examination interview is ‘do you have a risk based program?’ Most compliance officers will jump the gun and reply ‘Sure we do!’. The follow up question however stumps compliance officers when the regulators ask ‘How do you monitor and maintain your risk based program?, to which most respondents answers fall terribly short and start backpedalling their responses. What is a risk based program and how do you get one? A risk based program...

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Compliance Officers and Personal Liability Report and What Compliance Officers Can Do.

Posted by on Nov 13, 2015 in AML, CCO Liability, Compliance Automation | 0 comments

Compliance Officers and Personal Liability Report and What Compliance Officers Can Do.

Written by Don Lee Are you a compliance officer feeling threatened with increased personal risk, you’re not alone. Thomson Reuters recently published the results of their survey on personal liability and compliance officers  in their report  titled ‘Rising personal liability – perception and reality’. Their report was quite impressive covering the entire world including major regulatory bodies in the United States, United Kingdom and Australia. To summarize the report; the overwhelming response of compliance...

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Managing Conflicts of Interest across BD and RIAs

Posted by on Oct 30, 2015 in Compliance Automation, Conflicts of Interest | 0 comments

Managing Conflicts of Interest across BD and RIAs

Written by  Don Lee Many BD firms are expanding their business in the shrinking BD market to the Investment Advisory space. The number of FINRA registered BDs have fallen in the last few years from approximately 6000 firms down to 4000 firms; where as the number of State and SEC Registered Investment Advisors has increased to over 20,000. Some BD firms are being acquired, others are changing focus from the BD to the RIA model, and some have just expanded with dual business lines. The RIA space has long had rules around conflicts of interest,...

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Are Debit Card transactions flying under your firm’s AML radar?

Posted by on Oct 29, 2015 in AML, Compliance Automation | 0 comments

Are Debit Card transactions flying under your firm’s AML radar?

Written by Don Lee All broker dealers have AML requirements and AMLCOs monitor transactions for ‘red flags’ based on their firms AML procedures. Most firms focus on wire movements and other standard red flags most of which are born out of the old NASD small firm’s template or recommended by compliance consultants. Many of these red flag rules are written broadly and may not specifically address the use of Debit Cards. For example, a firm may have a broad red flag such as ‘deposits and subsequent withdrawals outside of...

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7 Simple tips for Cyber-Security for Broker Dealers and RIAs

Posted by on Oct 28, 2015 in Compliance Automation, Cybersecurity | 0 comments

7 Simple tips for Cyber-Security for Broker Dealers and RIAs

Written by Don Lee Cyber-Security is a hot topic with the SEC and FINRA. Regulators have announced their examinations will include Cyber-Security and some will have a Cyber-Security exam on its own. But are you ready? Here are 7 simple things you can implement right now to get started: 1. Create an inventory of your computer network. Include all computers, laptops, printers, servers and anything else connected to your network. Make sure your inventory has your operating system version and ensure all machines have current updates. Many...

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SEC’s Branch Chief on Data Analysis and 9 things CCO’s should do

Posted by on Oct 26, 2015 in Compliance Automation | 0 comments

SEC’s Branch Chief on Data Analysis and 9 things CCO’s should do

  Written by Don Lee SEC’s Chief of Staff Andrew Donahue recently spoke at the National Regulatory Services Fall conference and  gave CCO’s color on how the SEC uses data in its examination processing,  and  identifies 9 things CCO should do in their practice. Donahue stated that OCIE’s Risk Analysis Examination Group leverages technology in the examinations of clearing firms and broker dealers. Transaction data is is analyzed over a period of time to identify potential problematic behavior across firms including...

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SEC’s use of ‘Big Data’ anlaytics and Compliance

Posted by on Oct 23, 2015 in Uncategorized | 0 comments

SEC’s use of ‘Big Data’ anlaytics and Compliance

Written by Don Lee The SEC had a record year of 807 enforcement actions and orders for $8.2 Billion in penalties and disgorgements of ill gotten gains for their year ending September 30th. SEC Chairwoman Mary Jo White said the enforcement division’s use of data, analytics and other professional expertise within the agency helped it increase the number of cases filed. In this day and age of supercomputers and ‘big data’, regulators are using these new tools to increase surveillance over firms. FINRA has been doing this for...

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AML Compliance Automation and SARs filing … risks of manual reviews

Posted by on Feb 27, 2015 in Compliance Automation | 0 comments

AML Compliance Automation and SARs filing … risks of manual reviews

Written by Don Lee Securities and Exchange Commission Enforcement Chief Andrew Ceresney said to the broker-dealers community at the  Securities Industry and Financial Markets Association’s 2015 Anti-Money Laundering & Financial Crimes Conference in New York that compliance with the Bank Secrecy Act “is not optional,” and that a BD’s failure to file a required suspicious activity report (SAR) “is, by itself, a basis for enforcement action.” Many broker dealers are still using paper exception reports and other manual methods...

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