Welcome to This Week In Compliance: GAN’s weekly news roundup, where we curate the latest stories on compliance and anti-corruption to keep you informed. This week we cover the SEC's fine on a credit rating agency that violated conflict of interest rules. Read the full story and more news below:
SEC Orders Credit Rating Agency to Pay USD 3.5 Million for Conflicts of Interest Violations:
The U.S. Securities and Exchange Commission charged credit agency Morningstar Credit Ratings LLC for violating conflict of interest rules that were intended to separate the agency's credit rating department from its sales and marketing endeavors. According to the SEC's filing, Morningstar's credit risk rating department provided data to marketing and sales to find prospective clients. The agency also did not have written procedures and internal policies to separate the firm's departments which led to the conflict of interest.
U.K.’s Serious Fraud Office Closes Probe Into ABB’s Dealings With Unaoil:
The U.K. Serious Fraud Office (SFO) has closed a bribery probe into engineering giant ABB Ltd.'s dealings with Monaco-Based Unaoil Group. The investigation began after ABB disclosed the findings of an internal investigation that revealed allegations of potentially improper payments to third parties. According to the SFO, the probe failed to meet specific standards for the institution to pursue a full fledged-prosecution process. The SFO's announcement comes after Unaoil's top executives were subjected to fines for bribery last year in the U.K. and U.S.
Former Swedbank Employees Charged With Laundering ‘Large’ Sums:
Latvian authorities charged several of Swedbank's former employees for ignoring AML procedures and failing to report suspicious transactions from 2017. The individuals were accused of allowing large scale cash currency exchanges to occur without keeping proper identity records of the involved entities and on the origin of the funds. The bank reported the failings to the authorities after Swedbank's internal security system flagged the transactions. Swedbank stated that the involved employees were fired from the Latvian branch and also announced changes in their methods of assessment to prevent future offenses. Swedbank affirmed their full cooperation with the authorities and is also facing similar investigations in the U.S. and Estonia for potential money-laundering breaches.
Australian Bank Westpac Admits Breaching Money-Laundering Laws:
After Australia's financial watchdog AUSTRAC filed a civil lawsuit against Australia's second-biggest bank Westpac in November last year for money laundering breaches, the bank has admitted to millions of breaches of AML and counter-terrorism laws in Australia's Federal Court. The bank admitted to having failed to appropriately report more than 19 million international transfer reports in due time. While Westpac also admitted to failing to conduct proper due diligence and of keeping proper records, they stated in a separate statement that they continue to cooperate with AUSTRAC on the investigation. Westpac has set aside 900 million AUD for foreseeable enforcement costs.
EU Issues Formal Notice to 17 Member States Over Money Laundering Directive:
The European Commission (EC) announced that almost half of the EU's member states have failed to fully implement the EU's 5th Anti-Money Laundering Directive, which had a transposition deadline of January the 10th 2020. The formal notice, which was directed towards Cyprus, Hungary, the Netherlands, Portugal, Romania, Slovakia, Slovenia, and Spain, stated that these countries have failed to implement any of the Directive's elements and urged member states to transpose the regulation. The EC also stated that Austria, Belgium, the Czech Republic, Estonia, Greece, Ireland, Luxembourg, and Poland have only implemented the Directive's provisions partially. Luxembourg was also singled out for 'allowing firms to deduct interest from their tax bills.'
Moldova Charges Former Head of Democratic Party for USD 1 Billion Fraud:
Moldovan prosecutors charged Vlad Plahotniuc, an oligarch and the former leader of the Democratic Party, for extortion, fraud, and organized crime. Plahotniuc reportedly fled Moldova to the U.S. in 2019 and is being accused of being linked to a major theft scandal involving the disappearance of nearly one-eighth of Moldova's GDP (USD 1 billion) from the country's three largest banks from 2012 to 2014. Moldova is seeking extradition from the United States once the indictment is translated into English.
DOJ issues further guidance, warnings on ephemeral messaging apps
Federal appeals court upholds 5.6B USD Visa and Mastercard settlement
The DOJ updates its guidance on corporate compliance programs