- Federal Reserve Board fines Wells Fargo $67.8 million for inadequate oversight of sanctions risk at its subsidiary bank / FED
On March 30, 2023, The Federal Reserve Board announced that it has fined Wells Fargo & Co., of San Francisco, California, $67.8 million for the firm’s unsafe or unsound practices relating to historical inadequate oversight of sanctions compliance risks at its subsidiary bank, Wells Fargo Bank, N.A. Wells Fargo & Co.’s deficient oversight enabled the bank to violate U.S. sanctions regulations by providing a trade finance platform to a foreign bank that used the platform to process approximately $532 million in prohibited transactions between 2010 and 2015.
The Board’s action is being taken in conjunction with an action by the U.S. Department of the Treasury’s Office of Foreign Assets Control, which is imposing a separate penalty on Wells Fargo Bank for these violations. The total penalty announced by both agencies is approximately $97.8 million.
For more information: Federal Reserve Board – Federal Reserve Board fines Wells Fargo $67.8 million for inadequate oversight of sanctions risk at its subsidiary bank
- Guidance on Beneficial Ownership of Legal Persons / FATF
On March 10, 2023 the FATF has updated the guidance from March 2022 that will help countries implement the revised Recommendation 24.
In March 2022, the FATF agreed on tougher global beneficial ownership standards in its Recommendation 24 by requiring countries to ensure that competent authorities have access to adequate, accurate and up-to-date information on the true owners of companies.
The revisions to the Standard will help prevent the organized criminal gangs, the corrupt and sanctions evaders from using anonymous shell companies and other businesses to hide their dirty money and illicit activities.
The guidance will help countries identify, design and implement appropriate measures in line with the revised Recommendation 24 to ensure that beneficial ownership information is held by a public authority or body functioning as a beneficial ownership registry, or an alternative mechanism that enables efficient access to the information.
For more information: Guidance on Beneficial Ownership of Legal Persons (fatf-gafi.org)
- Financial Conduct Authority to tackle competition problems with the trade data market / FCA
On March 9, 2023, a new Financial Conduct Authority (FCA) report has found that competition in some parts of the wholesale data market is not working as well as it should.
The report suggests the market currently does not work as effectively as it could in allowing effective competition and innovation which is a key part of the FCA’s strategy to improve the UK’s financial services sector.
Among the findings, the report found:
• Some trading markets are concentrated among a few firms so there is little choice for users not to buy this important data and switching supplier is not an easy option.
• The way data is sold can be complex, making it harder for data users to make informed choices.
• Complexity and limited choice result in additional costs to data users. These are likely to be passed on to UK retail investors and savers.
• Despite rules in place requiring delayed data to be distributed for free, many users end up with little choice but to pay for data.
For more information: Financial Conduct Authority to tackle competition problems with the trade data market | FCA
- Foreign National Sentenced for Victimizing U.S. Persons Through Cyber-Enabled Fraud Schemes / DOJ
On March 27, 2023, A Nigerian national was sentenced to four years and one month in prison for his role in a cybercriminal group operating out of Nigeria and Malaysia, among other places, that executed complex financial fraud scams using the internet.
According to court documents, between December 2011 and January 2017, Solomon Ekunke Okpe, 31, of Lagos, and his co-conspirators devised and executed business email compromise (BEC), work-from-home, check-cashing, romance, and credit card scams that targeted unsuspecting individuals, banks, and businesses in the United States and elsewhere, and were intended to cause more than a million dollars in losses to U.S. victims. Among the victims of the scheme were First American Holding Company and MidFirst Bank.
For more information: Foreign National Sentenced for Victimizing U.S. Persons Through Cyber-Enabled Fraud Schemes | OPA | Department of Justice
- United States Orders Matador Production Company to Reduce Unlawful Air Pollution from its Oil and Gas Wells in New Mexico, Eliminating 16,000 Tons of Harmful Air Pollutants / DOJ
On March 27, 2023, Matador Production Company has agreed to pay a penalty and ensure compliance with both state and federal clean air regulations at all 239 of its New Mexico oil and gas well pads to resolve unlawful operations alleged in a civil complaint filed under the Clean Air Act and state regulations.
The complaint, filed jointly by the United States, on behalf of the U.S. Environmental Protection Agency (EPA), and the New Mexico Environment Department (NMED), alleges that Matador failed to capture and control air emissions from storage vessels; comply with inspection, monitoring and recordkeeping requirements; and obtain required state and federal permits at 25 of its oil and gas production operations in New Mexico. NMED and EPA identified the alleged violations through flyover surveillance and field investigations conducted in 2019.
For more information: United States Orders Matador Production Company to Reduce Unlawful Air Pollution from its Oil and Gas Wells in New Mexico, Eliminating 16,000 Tons of Harmful Air Pollutants | OPA | Department of Justice
- SEC Charges Crypto Entrepreneur Justin Sun and his Companies for Fraud and Other Securities Law Violations / SEC
The Securities and Exchange Commission (“SEC”) announced charges against crypto asset entrepreneur Justin Sun and three of his wholly-owned companies, Tron Foundation Limited, BitTorrent Foundation Ltd., and Rainberry Inc. (formerly BitTorrent), for the unregistered offer and sale of crypto asset securities Tronix (TRX) and BitTorrent (BTT). The SEC also charged Sun and his companies with fraudulently manipulating the secondary market for TRX through extensive wash trading, which involves the simultaneous or near-simultaneous purchase and sale of a security to make it appear actively traded without an actual change in beneficial ownership, and for orchestrating a scheme to pay celebrities to tout TRX and BTT without disclosing their compensation.
For more information: SEC.gov | SEC Charges Crypto Entrepreneur Justin Sun and his Companies for Fraud and Other Securities Law Violations
This update is provided as general information only and may not be relied upon in any individual case without additional legal advice.
