Governance, Risk & Compliance

Lessons learned: BHP Billiton fined for providing public officials luxury travel

REUTERS/David Gray

The Securities and Exchange Commission on Wednesday charged global resources company BHP Billiton with violating the Foreign Corrupt Practices Act (FCPA) when it sponsored foreign government officials as guests at the 2008 Summer Olympics in Beijing.

As a result of the SEC’s cease and desist order, BHP Billiton agreed to pay a $25 million penalty to settle the regulator’s charges. BHP is headquartered in the UK and Australia and trades on the New York Stock Exchange via American Deposit Receipts, giving the SEC civil-enforcement jurisdiction in this case. (more…)

Finance, legal professionals question impact of OSC Whistleblower Program on ‘culture of compliance’

Finance, legal professionals question impact of OSC Whistleblower Program on 'culture of compliance'

The Ontario Securities Commission (OSC) recently closed the consultation period on its proposed whistleblower program, but debate over the draft rules appears to be far from over. Finance and legal professionals have raised concerns over the program, particularly the absence of requiring eligible whistleblowers to report misconduct to internal compliance personnel prior to approaching the OSC.

Modeled after the Dodd-Frank Whistleblower Program, the OSC’s Whistleblower Program seeks to encourage individuals with information of financial misconduct at their firms to come forward. (more…)

Former U.S. CFTC chair criticizes Volcker call to merge agency with SEC

Former U.S. CFTC chair criticizes Volcker call to merge agency with SEC

A former head of the Commodity Futures Trading Commission has questioned Paul Volcker’s call to merge U.S. regulatory agencies under the leadership of the Federal Reserve. (more…)

SEC examinations grow aggressive, sometimes intrusive – industry panel

SEC examinations grow aggressive, sometimes intrusive – industry panel

Gone are the kinder, gentler days when it comes to onsite examinations by the Securities Exchange Commission, say senior compliance officers, who portray the agency’s recent behavior as much more aggressive, and at times even intrusive on a firm’s time and resources.

At a New York conference sponsored by the Regulatory Compliance Association this week, industry participants heard of recent examples of SEC exams where compliance officers described strained and tense interactions with the agency’s staff. (more…)

U.S. dollar role in sanctions, AML fight threatened by looming rival payments system

U.S. dollar role in sanctions, AML fight threatened by looming rival payments system

A looming erosion of U.S. dollar dominance in international payments threatens to cripple the worldwide reach of financial sanctions and anti-money laundering controls led by the United States and its allies. This would compel Western financial institutions to improve data and analysis about their customers to guard against tainted money, officials said.

“It’s not if; it’s when,” retired Rear Adm. Chris Parry, a U.K.-based strategic forecaster, told a Thomson Reuters Financial & Risk conference in New York. “Every financial institution needs a strategy to be developed now for the days that are coming when money will be thrown across the wall to you and you have no indication whatsoever of where it’s come from and its provenance.” (more…)

Deferred prosecution agreements: Working with the independent monitor — Part Three

Deferred prosecution agreements: Working with the independent monitor -- Part Three

Independent monitors have become a common feature of settlement agreements when government enforcement authorities agree to defer or forgo the prosecution of a financial firm. The monitor provision brings government oversight into a company’s hallways and raises the stakes for any new lapses. The growing record of experience with independent monitors has given rise to a useful body of knowledge on the dos and don’ts for companies in managing of the relationships.

This final installment of a three-part series on deferred prosecution agreements and non-prosecution agreements (DPAs and NPAs) focuses on the monitor’s role and tips for compliance professionals in working with them. Part One of the series discussed how such agreements have been used and some recent examples of their imposition and extension in duration. Part Two focused on best practices for remediating compliance program gaps or other deficiences outlined in the agreement. (more…)

INTERVIEW: E*Trade bank growth limited by U.S. regulatory asset threshold – CRO Mike Pizzi


The Dodd-Frank $50 billion asset threshold used to categorize systemically important banks has been a strategic business factor for E*Trade, the online broker, and unless there are compelling factors to breach the mark, the firm will continue to limit expansion of its balance sheet, chief risk officer, Mike Pizzi, said in an interview this week. (more…)

Shortcomings seen in U.S. nonbank systemic-risk process for insurers

REUTERS/Brendan McDermid

Critics of the the Financial Stability Oversight Council’s designation of nonbanks as systemically important got a chance last month to point to what they viewed as shortcomings in its approach, while also offering clues for possible improvements, during a U.S. Senate hearing on the issue.

Ever since its creation under the 2010 Dodd-Frank Act, the process by which the council designates systemically important financial institutions, or SIFIs, has been criticized as being heavily politicized, and marred with opacity.

FSOC, its rationale, and designation process


Financial crime in MENA

financial crime survey

Regulatory compliance has become an incredibly complex and challenging issue for many companies and will remain a challenge for senior executives for some time to come. With that in mind, we recently released the findings of a financial crime report covering the Middle East and North Africa region in 2014. The report, conducted in collaboration with Deloitte, is the first of its kind in MENA.

According to the survey, around 85% of respondents have seen anti-crime and compliance activities increase in the last two years, whilst less than 6% of respondents believe that their compliance policy will stay the same over the short term. More than 75% of participants surveyed expect that compliance related costs will continue to increase in the short term with technology (26%) and process improvement (22%) standing out as key tools organizations are investing in to manage compliance risks. Almost half of those surveyed highlighted a lack of confidence in the effectiveness of their existing financial crime programs when compared with both domestic and international regulatory requirements. Similarly, 57% of respondents questioned the ability of their compliance policy to prevent illicit activity.

After analyzing the results, we noted a number of themes had emerged: (more…)

Governments to banks: Comply or else

When a government uses sanctions to keep rogue nations in check, or law enforcement agencies bust criminal cartels, they can usually thank a bank. Financial institutions may seem like an unlikely partner in crimefighting—but they actually play a crucial role in maintaining global security. But banks are growing more wary of their role in helping freeze or investigate suspicious channels in the global flow of money, and their caution could create fertile soil for even more crime—and more economic instability.

Read more about the bankers’ dilemma.