Archives: Investigations and Enforcement

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2015 FinCEN Enforcement Trends

To read a review of FinCEN’s enforcement efforts in 2015 and 2014 , which reveal a marked trend away from its longstanding focus on depository institutions and toward otherwise unregulated financial institutions, as well as an increased focus on pursuing penalties against individuals, view the Reed Smith client alert here.… Continue Reading

OCC Announces Shift in Enforcement Policy: Increased Focus on Internal Risk Management and Personal Liability of Bankers

The Office of the Comptroller of the Currency (“OCC”), the primary federal regulator for most large banks, recently issued a new policy on agency enforcement actions seeking civil money penalties (“CMPs”) against institutions and individuals.  There are several key developments that will directly affect institutions and the directors, officers, employees, major shareholders, and vendors associated … Continue Reading

New “Senior Managers Regime” to be introduced for all financial services firms, including the fund management sector

The Government has confirmed that it will be pushing forward with extending the Senior Managers and Certification Regime to all financial services firms (including investment firms and fund managers), following the Fair and Effective Markets Review (FEMR) report’s recommendation (and Mark Carney’s Mansion House speech indication) of the extension of the SMR to fixed income, … Continue Reading

Addressing Attestations

Attestations are part of the FCA supervisory toolkit used to ensure accountability from senior management in all regulated firms. They are a means by which the FCA can gain personal commitment from an approved person that specific action has been taken or will be taken, often without requiring ongoing regulatory involvement.  We have seen attestations … Continue Reading

FinCEN Proposes AML Regulations for Investment Advisers

In August 2015, the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) proposed regulations that would require investment advisers subject to SEC registration to establish anti-money laundering (AML) programs.1 The proposal also adds such investment advisers to the definition of “financial institutions” under the Bank Secrecy Act (BSA), which consequently requires them to report … Continue Reading

How Many SARs Does It Take to Find Yourself in Regulators’ Crosshairs? Answer: None

Securities and Exchange Commission (“SEC”) Enforcement Division Director Andrew Ceresney, recently drew attention when he announced that the SEC intends to include among its enforcement priorities compliance with the Bank Secrecy Act (the “BSA”). Ceresney’s comments, made during SIFMA’s 2015 Anti-Money Laundering and Financial Crimes Conference, focused on broker-dealers and the SEC’s concern that broker-dealers … Continue Reading

SEC and the Municipal Securities Market

The SEC has been increasingly active in its enforcement efforts in the municipal securities market. Such efforts are being conducted through its Municipal Securities and Public Pensions unit, which was one of the five specialized enforcement units the SEC first created in 2010. In 2014, the SEC boldly acted in this area by offering a deal to underwriters and issuers of municipal securities, incentivizing them to self-report potential securities laws violations. The program, the Municipalities Continuing Disclosure Cooperation ("MCDC") initiative, offered underwriters and issuers the opportunity to self-report possible disclosure violations based on the requirements of Rule 15c2-12 of the Securities Exchange Act. Generally, Rule 15c2-12 prohibits underwriters from selling municipal securities unless the issuers have agreed to make certain continuing disclosures regarding certain financial information, operating data, and material events affecting the municipal securities. The MCDC initiative invited underwriters and issuers of municipal securities to self-report potential securities fraud violations, asking underwriters and issuers to identify those transactions within the prior five years whose offering documents contained potentially inaccurate statements regarding prior compliance by the issuer with 15c2-12 continuing disclosure obligations.… Continue Reading

Mortgage Originator Sentenced for Fraud – Reminder of Need for Third-Party Vigilance

On August 14, 2013, the former manager of an Allentown, Pennsylvania, mortgage loan origination company was sentenced to four years in prison and ordered to pay restitution of $979,562.20 in connection with a mortgage fraud conspiracy. According to the U.S. Attorney’s Office for the Eastern District of Pennsylvania (the “USAO”), the former general manager of … Continue Reading

OCC Enforcement Action Targets Reverse Discrimination Leaving Institutions With Open Questions

In a BNA Banking Report article, Reed Smith’s William Mutterperl wrote about the recent Office of the Comptroller of the Currency (OCC) enforcement action that applied the disparate impact theory of discrimination in finding that a group of white male borrowers and male-female married couple borrowers had been discriminated against. This latest enforcement action by … Continue Reading

GOP Senators Tell President They Will Oppose Any CFPB Nominee Until Reforms Are Made

On January 31, 2013, 42 Republican Senators joined in a letter to President Obama, warning that they will oppose the confirmation of any nominee to be Director of the Consumer Financial Protection Bureau ("CFPB"), until significant reforms are made to ensure "transparency and accountability" at the Bureau.… Continue Reading

Reed Smith to Present on CFPB Examinations and Enforcement at Bankers Association’s Senior Management Conference

On Thursday, September 13, 2012, Robert M. Jaworski and Travis P. Nelson will be speaking at the New Jersey Bankers Association’s 2012 Senior Management Conference. This presentation will examine past and future supervisory policies and issues that are currently being considered by the Consumer Financial Protection Bureau (CFPB), including the areas of mortgage lending and … Continue Reading

Reed Smith Comments on the CFPB’s First Enforcement Action and Subsequent Regulatory Bulletin

Our Financial Services Regulatory Group’s own Bill Mutterperl recently commented on the CFBP’s first enforcement action against Capital One Financial Corporation and the regulatory bulletin that was subsequently issued as a result of a $210 settlement reached between Capital One and the CFPB, along with other federal regulators. In looking at the implications of this … Continue Reading

Another Foreign Bank Fined by OFAC

Our Global Regulatory Enforcement colleague, Michael J. Lowell, recently wrote about multiple settlements being made by the OFAC, the most recent of which is with a foreign bank relating to payments processed through U.S. financial institutions. On June 14, 2012, OFAC announced a settlement with the National Bank of Abu Dhabi (“NBAD”) for $855,000 to … Continue Reading

Dutch Bank’s Efforts to Avoid OFAC Sanctions Leads to $619 Million Penalty

Our Global Regulatory Enforcement colleagues, Michael J. Lowell and Michael A. Grant, recently wrote about the announcement made by the U.S. Office of Foreign Assets Control (“OFAC”) and Bureau of Industry & Security (“BIS”), regarding a settlement with ING Bank N.V. (“ING”), relating to potential liability under various U.S. sanctions against Burma (Myanmar), Cuba, Iran, Libya, and … Continue Reading

CFPB Joins the TILA Rescission Debate: Is 3 Years Really 3 Years?

On March 26, 2012, the Consumer Financial Protection Bureau ("CFPB") filed an amicus curiae brief in Rosenfield v. HSBC Bank, USA, et al. in the United States Court of Appeals for the 10th Circuit in support of the consumer-appellant, arguing that courts have not correctly interpreted the federal Truth-in-Lending Act ("TILA") regarding how long a consumer has to rescind a mortgage loan. This brief is the first of four briefs that the CFPB intends to file in the appellate courts regarding this issue, which is being litigated in 10 separate appeals in four jurisdictions.… Continue Reading
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