Financial Regulatory Forum

Future higher ethical standards will judge today’s conduct, compliance experts say

By Stuart Gittleman, Compliance Complete

NEW YORK, March 14 (Thomson Reuters Accelus) - Companies that want to manage their legal and regulatory liability and their reputational capital should treat current standards as the starting point – not the finish line – for their ethics and compliance programs, conference attendees heard Tuesday.

“Your company will be judged in the future by what it does today. Transparency is rapidly increasing, and you don’t know how it will affect your business and reputation,” one of the speakers, Dirk Mohrmann, chief executive officer of World Compliance, told attendees at the 2013 Global Ethics Summit, which was held in New York and was sponsored by Ethisphere and Thomson Reuters. (more…)

Compliance is today’s slogan for upcoming law graduates, conference speakers say

By Stuart Gittleman, Compliance Complete

NEW YORK, Feb.13 (Thomson Reuters Accelus) - ”I just want to say one word to you. Just one word. Are you listening? Plastics,” a business executive told a young Dustin Hoffman in the 1967 movie The Graduate.

Today’s one word of advice to a young lawyer could easily be “compliance,” Brooklyn Law School Dean Nick Allard said Friday in opening a symposium on “The growth and importance of compliance in financial firms: meaning and implications.” (more…)

U.S. financial examiners’ guidelines underline increasing role of social networks

By Bora Yagiz, Compliance Complete

NEW YORK, Feb. 13 (Thomson Reuters Accelus) - The guidelines on social media proposed by bank regulators comprising the Federal Financial Institutions Examination Council (FFIEC) in January are intended as a basic tool to help financial institutions identify potential trouble areas and address them as part of an overall risk management program.

The council identified potential risks for financial institutions in the areas including deposit insurance, debt collection practices, use of payments systems, equal access for credit, and bank-secrecy anti-money laundering processes.  (more…)

Global firms facing challenges of shifting regulations, their top lawyers say

By Stuart Gittleman, Compliance Complete

NEW YORK, Dec. 13 (Thomson Reuters Accelus) - The “shifting sands” of regulation, especially since the onset of the financial crisis, are making it more challenging for U.S. public companies to conduct global operations, the top lawyers for three such companies said Friday.

The general counsels – Andrew Bonzani of Interpublic Group, Peter J. Ganz of Ashland Inc. and Elizabeth M. Sacksteder of Citigroup – spoke at the Institute for Corporate Counsel, which was cosponsored by Thomson Reuters and the New York City Bar Association. (more…)

Internal compliance reporting programs must consider motivations for acting, experts say

By Stuart Gittleman, Compliance Complete

NEW YORK, Dec. 10 (Thomson Reuters Accelus) – Preventing fraud, not just reacting once it occurs, should be the goal of every corporate compliance program, but business has a mixed record in encouraging employees to report suspected misconduct internally, speakers at a Thomson Reuters forum said Tuesday.

Preventing fraud and encouraging internal reporting has also been mandatory for public companies since 2002. Among other things, Section 301 of the Sarbanes-Oxley Act requires issuers’ audit committees to establish procedures for employees to confidentially and anonymously submit concerns over questionable accounting or auditing matters. And Section 806 of Sarbanes-Oxley generally prohibits issuers from retaliating against employees for raising these concerns. (more…)

INTERVIEW: Whistleblowing is a duty if internal calls unheeded, U.S. bailout overseer tells compliance officers

By Stuart Gittleman

NEW YORK, July 31 (Thomson Reuters Accelus) - Compliance officers have a duty to become whistleblowers if their concerns are not heeded internally, Neil Barofsky, the watchdog over the U.S. financial crisis bailout program, told Compliance Complete in an interview.

Exposing wrongdoing is the only way to eradicate a “cancer” of fraud that can endanger companies and the larger economy, said Barfosky, who also in the interview warned on dangers of a revolving door between financial regulators and Wall Street.

Barofsky was appointed Special Inspector General for the Troubled Asset Relief Program in the aftermath of the September 2008 financial crash by President George W. Bush and served from mid-December through March 2011, when he left to teach at New York University School of Law.

Compliance lessons: U.S. Senate report on HSBC AML failings

By Susannah Hammond

LONDON/NEW YORK, July 20 (Thomson Reuters Accelus) - The United States Senate Permanent Sub-Committee on Investigations has published a report into U.S. Vulnerabilities to Money Laundering, Drugs, and Terrorist Financing using HSBC Group plc as a case history. The report does not detail enforcement action taken, though there are several likely fines being considered by a number of U.S. authorities regarding HSBC’s anti-money laundering (AML) failings; it is however a valuable insight into the operations and associated compliance, risk and AML issues arising in a global financial services firm.  (more…)

U.S. brokerage regulator warns of ‘unpleasant surprises’ on ETNs

By Stuart Gittleman

NEW YORK, July 11 (Thomson Reuters Accelus) – The Financial Industry Regulatory Authority, the U.S. brokerage regulator, warned investors Tuesday in an alert of the features and risks of exchange-traded notes.

The alert, Exchange-traded notes: avoid unpleasant surprises, listed the risks of certain ETNs and urged investors to carefully investigate before investing in them.  (more…)

Barclays scandal highlights value of monitoring and testing – governance experts

By Emmanuel Olaoye

WASHINGTON/NEW YORK, July 10 (Thomson Reuters Accelus) - A major theme in the Barclays scandal over rate-rigging is the firm’s failure to conduct adequate monitoring and testing of its compliance program, governance experts have told Thomson Reuters Accelus.

Barclays has agreed to pay $453 million to settle charges by U.S. and UK authorities that its employees manipulated the London Interbank Offered Rate, or LIBOR, a key benchmark for global financial transactions, including payments on mortgages, credit cards and other financial contracts.  (more…)

Barclays’ governance, compliance weaknesses exposed in U.S. regulator’s findings

By Emmanuel Olaoye

WASHINGTON/NEW YORK, July 3 (Thomson Reuters Accelus) - A U.S. regulator’s case against Barclays revealed significant failures with the bank’s internal controls as well as failures with its corporate governance.

Barclays agreed last week to pay $453 million to U.S. and British authorities to settle allegations that it rigged key interbank lending rates, called the London Inter-bank Offering Rate (Libor) and a separate Euribor rate, by manipulating its reported rates in submissions to the British Bankers Association, which calculated the benchmark figures. (more…)

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