James Thomas considers fraud risks associated with cryptocurrencies in the context of COVID-19
2020 has been a year that most of us would gladly forget. Nevertheless, as we look towards 2021, it is worth considering the lessons learned over the last 12 months, assessing the evolving landscape, and (where possible) drawing on any positives that have come to light. This article considers some of the main features of fraud in 2020 and highlights potential trends for the coming year.....More
The year began with the FCA coming under heavy criticism for suspending its thematic review into banking culture. However, the regulator recently reaffirmed in its Business Plan for 2016/17 that firms’ culture and governance is one of the seven priority themes around which it will organize core activities for the coming year.
Since the Financial Conduct Authority (FCA) replaced the Financial Services Authority there has been a short run, but dramatic, trend in the UK towards greater whistleblowing activity. 2014 saw 1,367 complaints reported to the FCA, an increase of 44% on 2013 and of 142% on 2012. However, in 2015 reported complaints declined by a fifth compared with 2014, according to law firm Pinsent Masons.....More
“Implementation Day” – the lifting of sanctions following Iran’s compliance with the Joint Comprehensive Plan of Action (JCPOA) – came around more swiftly than some had anticipated at the time that the JCPOA was initially agreed. Anyone not expecting compliance to be achieved so rapidly will be feeling the pressure to get fully up to speed with this new landscape.
With the rising cost of data breaches and the rising volume of attacks, cyber security was one of the highest profile issues facing businesses in 2015. Cyber attacks are currently believed to cost business anywhere between $400-500bn a year and show little sign of abating.....More
The details that have emerged since the 21 October cyber attack on TalkTalk raise some serious questions not only for the broadband provider itself but for any business holding sensitive customer information.
People tend to assume a different persona within the workplace, in much the same way as many individuals adopt a completely different set of social standards when they get behind the wheel of a car.....More
“There is a risk of setting a ‘know your customer’s customer’ standard for the whole global system,” Anders Borg, former Swedish Finance Minister, has warned.
Remittance streams from family members living overseas form an essential source of money for many people living in the Pacific region, and a significant proportion of the GDP of many Pacific islands. However, recently these flows of money have come under threat as many global banks have ceased providing banking services for money transfer operators (MTOs) in the region, due to heightened sensitivity to AML and CFT requirements.....More
The final report of the Fair and Effective Markets Review (FEMR) was published last week. Commissioned in response to the series of scandals that have blighted the fixed income, currency and commodities (FICC) markets, the Report’s account of the shortcomings that led to such scandals is depressingly familiar; a combination of:
It’s been said before, but for those in search of a career that is both challenging and rewarding there has never been a better time to work in compliance. The challenges come in the form of the abundance and complexity of current and forthcoming regulations, increasing scrutiny and greater enforcement activity; the rewards through the growing demand that this has created for skilled compliance professionals.....More
There is a serious shortfall in transparency, integrity and equality of access within the lobbying process across Europe, according to a report released last week by Transparency International. This has created a need to “foster a culture of integrity among companies and organisations seeking to influence public policy,” says TI.
The HM Treasury Anti-money laundering and counter terrorist finance supervision report 2013-14, released earlier this week, aims to provide a snapshot of the progress made over the last 12 months by UK AML/CFT supervisors in:....More
The call for greater standards of professionalism within the financial sector has increased in volume in the years following the financial crisis. And no doubt that call will continue to get louder.
Financial regulation has received so much mainstream attention in the recent past that it’s easy to forget that criticisms of “toothless regulators” or of the “glacial pace of regulatory change” are universal, and that the need for improved regulation and compliance expertise cuts across many sectors of the economy. The most recent example comes from the world of groceries retailing.....More
As we enter 2015 financial institutions are confronted with an uncertain and shifting economic and political landscape. 2014 has seen slower than hoped for global economic expansion with stalling Chinese growth and the burgeoning Rouble crisis, while the current situation in Greece places the future of the Eurozone in the balance. Meanwhile, for UK financial institutions, political uncertainty abounds ahead of the next general election.
The OECD Foreign Bribery Report, released earlier this month, provides some interesting insights into corruption within international business. Not surprisingly, it highlights the usual sectors as hotspots for bribery and corruption activity. Drawing on data from the 427 foreign bribery cases that have been concluded since 1999 (when the OECD Anti-Bribery Convention first entered into force) the report finds that the extractive sector accounted for 19% of these, construction 15%, and transportation and storage a further 15%.....More
In a recent speech at the New York Federal Reserve, Barclays Chairman Sir David Walker argued that: “Regulators cannot and should not try to regulate culture, which is a matter for the individual entity”.
2014 has so far been a year of massive regulatory fines. The US authorities in particular have upped the ante in their actions against large financial institutions. Amongst the highest profile of these was the $9bn fine issued against BNP Paribas in July, which led recently to the resignation of the bank's chairman, Boudouin Prot.....More
In this age of increasingly enlightened, engaged and empowered consumers, last year’s horse meat scandal had many choking in outrage on their locally-sourced, organic, gluten-free cornflakes. The episode provided a clear red flag for potential shortcomings in the governance of global food supply chains, and the greater scrutiny that the food system has been subjected to by authorities in the aftermath of the scandal has begun to reveal the true extent of the market for counterfeit food.
An investigation published by the New York Times recently provided a fascinating read for anyone involved in countering the financing of terrorism (CFT). While it has long been believed that counterfeiting provides the primary source of financing for terrorists, the Times report suggests that ransom payments have now surpassed it.....More
I wrote recently about the emerging phenomenon of guilty pleas in US regulatory enforcement cases, and their apparent lack of substance following the Credit Suisse plea. In the Credit Suisse case no individuals were punished, no licenses revoked, no activities suspended, and the bank itself confirmed that the impact of the guilty plea on business had been "very limited", leaving many to wonder whether the bank's plea served any purpose other than to add some window dressing to an admittedly large fine.
High Frequency Trading (HFT) has been attracting considerable attention this month following the publication of “Flash Boys”, in which bond salesman turned financial writer Michael Lewis suggests that “US stock markets are now rigged by traders who go to astonishing lengths to gain a millisecond edge over their rivals”. With the book’s publication coming just days before the European Parliament voted to adopt HFT regulations under Mifid, the topic of HFT has been generating headlines on both sides of the pond.
Evidence published last week by the Treasury Select Committee (TSC) in connection with its Project Verde inquiry highlights again both the importance of good corporate governance and the fact that, for some in the financial sector, achieving it remains a struggle.....More
Last week an application was made to grant the Forth Bridge “UNESCO world heritage site” status. Of course, legend has it that no sooner is the bridge painted than the job of repainting it has to begin again... which seems a fitting theme as world leaders have been gathering in Davos to discuss, among other things, the seemingly unending task of regulatory reform.
2013 comes to a close in the UK with two significant developments which demonstrate that regulators and lawmakers have their sights set firmly on senior bankers. First came the news that Standard Chartered had stripped its Finance Director of responsibility for risk, reportedly under instructions from the Prudential Regulation Authority (PRA). Next, the Banking Reform Act received Royal Assent on 18 December.....More
At this time of the year, there are only two questions that really matter: (i) what's the largest Christmas tree I can fit into my house without it constituting a health and safety issue? and (ii) what's the biggest turkey five adults and three children can safely consume in one sitting?
If you are reading this as the holder of a compliance qualification then "congratulations!" You are, according to recent PwC research, hot property. PwC found that a staggering 100% of heads of compliance at UK asset management firms believe that there is currently a shortage of appropriately qualified compliance professionals in the market, and most expect this trend to persist for the next 2 to 3 years.....More
It would be an understatement to say that the financial sector has an image problem. Scarcely a day passes without the emergence of some new financial debacle or the imposition of some new high profile regulatory sanction.
Have social media changed the way we think and work and has this had (positive or negative) consequences for organizational culture?....More
The Parliamentary Commission on Banking Standards was set up to look into professional standards and culture within the UK banking sector. Its recent report – "Changing Banking for Good" – puts forward several recommendations.
When I’m not editing inCOMPLIANCE (ICA's quarterly journal for members) I spend a fair amount of my spare time watching small children terrorize each other in playgrounds, not because I particularly enjoy doing so, but because as the father of a three-year-old it comes with the territory.....More
We’ve been covering the topic of “culture” extensively within inCOMPLIANCE. And with good reason – cultural change at banks is increasingly being acknowledged as a board-level strategic challenge, and one which the compliance community can make a positive contribution towards.
Bonus season is guaranteed to provide some talking points, and this year is no different.For many within the City, the award of massive payouts for those at the helm of major financial institutions is simply the cost of employing such “talent”; a relatively small price to pay given the massive demands of the job.....More
2012 ended with a bang... but not in a good way. Coming just weeks after the conclusion of the Adoboli case, the UBS fine for LIBOR-rigging thrust the issue of culture in banking back onto the front pages.
The UK Guardian’s “Offshore secrets” series, and BBC Panorama’s concurrent investigation into the burgeoning trade in sham directorships, provided some fascinating (albeit depressing) reading/viewing for anyone interested in the prevention and detection of financial crime.....More
I’ve been keeping half an eye on the Lance Armstrong doping case that’s rocked the world of cycling and finding it hard to ignore some of the similarities it bears to the various crises and scandals that have hit the financial sector.
The ongoing financial downturn in the UK has served to keep the issue of financial sector remuneration firmly in the spotlight.....More
It’s early days in the Kweku Adoboli trial, which started last week, but it looks as though the outcome (and its broader fallout on UBS and the banking sector) will hinge to a large extent on how much of a “rogue” Adoboli is.
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