The importance of regulatory compliance management is perhaps most evidence when the regulatory imposes swinging fines, and the additional PR and credibility damage to a financial institution. FATCA , Basel III will require even more compliance controls and systems..
US Department of Justice (USDOJ)
•Credit Suisse : sentenced for conspiracy to help U.S. taxpayers hide offshore accounts from Internal Revenue Service. USD 2.6 billion in fines and restitution.
US Financial Industry Regulatory Authority (FINRA)
•FINRAfined Citigroup Global Markets, Inc. $15 million for failing to adequately supervise communications between its equity research analysts and its clients and Citigroup sales and trading staff, and for permitting one of its analysts to participate indirectly in two road shows promoting IPOs to investors.
New York Department of Financial Services (NYDFS)
•NYDFS has announced that the Bank of Tokyo Mitsubishi UFJ misled regulators – individual bank employees will resign and accept bans. it will pay an additional USD 315 million penalty
BTMU pressured its consultant, PwC, to remove key warnings to regulators on the bank’s transactions with sanctioned countries, including Iran, Sudan and Myanmar.
PwC previously received a 24-month consulting ban and paid USD25 million for misconduct in this case.
Italian Court
•Giuseppe Mussari, Antonio Vigni and Gianluca Baldassari, former chairman, chief executive and finance boss of Monte dei Paschi di Siena were sentenced to three years and six months in jail for misleading regulators in relation to a derivative trade with Nomera that according to the prosecutors was used to conceal the losses.
UK Financial Conduct Authority (FCA)
•FCA fined three former senior executives of Swinton Group Limited £928,000. The FCA’s action follows previous enforcement against Swinton:
2013 it was fined £7.4m after it adopted an aggressive sales strategy that resulted in mis-sales of monthly add-on insurance policies;
2009 the firm was fined £770,000 for failures in its sales of PPI.
Peter Halpin, former chief executive, is banned from acting as chief executive of a financial services firm.
Anthony Clare, former finance director, and Nicholas Bowyer, former marketing director, are banned from performing significant influence functions at financial services firms.
•The FCA imposed fines on five banks £1.1 billion for failing to control business practices in their G10 spot foreign exchange (FX) trading operations.
The imposed fines totalling £1,114,918,000 are divided as follows:
Citibank N.A. £225,575,000,
HSBC Bank Plc £216,363,000,
JPMorgan Chase Bank N.A. £222,166,000,
The Royal Bank of Scotland Plc £217,000,000
UBS AG £233,814,000.
•The FCA fined Chase de Vere Independent Financial Advisers Limited £560,000 for failures surrounding the sale of Keydata life settlement products. Chase de Vere did not research the Keydata products well enough to understand the risks posed to customers and did not ensure that its advisers understood those risk .
•FCA fined: the Royal Bank of Scotland Plc, National Westminster Bank Plc and Ulster Bank Ltd £42 million for IT failures and meant that the Banks’ customers could not access banking services.
According to the FCA the Banks had failed to put in place resilient IT systems which could withstand, or minimise the risk of, IT failures.
UK Serious Fraud Office (SFO)
•William Godley, a former director of investment firm Imperial Consolidated Group, (previously convicted for his part in a global fund conspiracy), has been ordered by the SFO to pay a confiscation order of £1,458,317.65 from which all the money will be paid in compensation to victims.
Central Bank of Ireland
•The Central Bank of Ireland fined Ulster Bank Ireland Limited €3,500,000 and reprimanded it in relation to IT and governance failings that resulted in approximately 600,000 customers being deprived of essential and basic banking services over a 28 day period during June and July 2012.
Brussels Judiciary Authorities
•A Belgian investigating judge has charged a Swiss private banking branch of HSBC with organized fiscal fraud, money laundering and forming a criminal organization to the benefit of over 1,000 wealthy clients, mostly people involved in the Antwerp diamond trade.
The branch is suspected of promoting and encouraging fiscal fraud by putting offshore companies in Panama and the Virgin Islands at the disposal of clients. It said the companies had no other purpose than to hide its clients’ assets.
The Reykjavik District Court
•Sigurjon Arnason, former head of Landsbanki, was jailed for 12 months for manipulating the bank’s share price and deceiving investors, creditors and the authorities in the dying days of the bank between 29 September and 3 October, 2008.
Swiss Financial Market Supervisory Authority (FINMA)
•FINMA has ordered UBS to disgorge a total of CHF 134m. FINMA found that over an extended period of time the bank’s employees in Zurich at least attempted to manipulate foreign exchange benchmarks. Employees acted against the interests of their clients. Risk management, controls and compliance in foreign exchange trading were insufficient. By breaching control requirements and owing to the misconduct of its employees, UBS severely violated the requirements for proper business conduct.
•FINMA imposed special conditions on the Coop Bank and issued the former CEO with an order prohibiting him from acting in a management capacity at any supervised institution. From 2009 to 2013, the Coop Bank manipulated the market price of its own bearer shares. Its actions constituted a serious violation of supervisory provisions on market manipulation and an infringement of its organisational and business conduct requirements.
Hong Kong Securities and Futures Commission (SFC)
•The SFC has banned Mr. Leung Wai Hung from re-entering the industry for 18 months, for failing to make proper records of the order instructions from his clients and circumventing the order recording requirements of his employer.
•The SFC has reprimanded Ms. Yue Siying, in her capacity as adviser at UBS AG and fined her $400,000 for negligence in handling a client’s trade orders. Instead of placing cross trades as initially instructed by the client, Yue and her assistant coordinated with the buyer to conduct a series of on-exchange matched trades.
