Financial Regulatory Forum

U.S. compliance salary report: More jobs, higher pay, but post-crisis boost is limited

By Emmanuel Olaoye and Stuart Gittleman, Compliance Complete

NEW YORK, May 29, 2014 (Thomson Reuters Accelus) - The job market for compliance professionals is picking up. But the high fines and complicated investigations financial services firms face as regulators and enforcers sharpen their scrutiny after the 2008 financial crisis have had a limited impact on compensation trends, boutique recruiters and global firms told Compliance Complete.

Average starting salaries in a broad range of financial compliance positions rose 2.3 percent to 4.2 percent in 2013, according to figures from Robert Half, an international recruitment firm. (See chart) That compares with about 3.4 percent among financial professionals as a group. (more…)

“Super managers,” governance spotlighted in economist Piketty’s blockbuster capitalism critique

By Henry Engler, Compliance Complete

NEW YORK – May 8, 2014 (Thomson Reuters Accelus) - How much of a role have corporate boards played in rising income inequality in the United States, the UK and elsewhere?

If one reads between the lines of French economist Thomas Piketty’s best-selling blockbuster book on capitalism and inequality – “Capital in the Twenty-First Century” – the answer might be: quite a bit.

The core of Piketty’s thesis and empirical evidence focuses on the long-term relationship between returns on capital and economic growth. Specifically, over long periods of time, when the return on capital exceeds the rate of economic growth, inequality tends to ensue. On the other hand, when growth exceeds capital’s return, income equality tends to improve as wealth is driven more by wage growth. Since 1970, according to Piketty, we have been living in world dominated by the former, with rising returns to holders of capital the primary force behind widening income gaps in the United States and certain European economies. In economic terms “r” – the return on capital – has been greater than “g” – the rate of growth – for some time. (more…)

Quasi-partnership model may help big banks mitigate risk

By Henry Engler, Compliance Complete

NEW YORK, NOV. 21 (Thomson Reuters Accelus) - The largest institutions on Wall Street could go a long way towards reducing risky behavior if they changed the way top levels of management are incentivized and compensated, and incorporated elements of a partnership model, says a former Goldman Sachs banker.

Taking a page from Goldman’s bygone management structure, Steven Mandis, now a professor at Columbia University, argues that one needs to think creatively of how to replicate the incentives, and ultimately the behavior, that was at work in the partnership model. (more…)

U.S. Justice Department chooses former prosecutor to be HSBC compliance monitor

By Brett Wolf, Compliance Complete

NEW YORK, June 6 (Thomson Reuters Accelus) - The U.S. Justice Department on Wednesday said it has chosen a former New York County prosecutor who is known for his innovative pursuit of criminals to police HSBC’s efforts to clean up its anti-money laundering program.

The Department’s decision to announce its choice at a time when a federal judge’s hesitation to sign-off on its settlement with HSBC has raised questions over the settlement’s prospects suggests the move is an attempt to win the judge’s approval, compliance experts said. (more…)

Standard Chartered’s big shareholders stay quiet on compliance, say focus is on governance

By Martin Coyle

LONDON/HONG KONG, Aug. 31 (Thomson Reuters Accelus) – Standard Chartered Bank’s major shareholders are declining to openly criticise the firm’s compliance practices but some cited overall governance issues as their primary interest following its settlement over allegations it breached Iran-sanctions laws. One institutional investor said that it had discussed compliance issues with the bank before this month’s $340 million settlement was reached with New York’s Department of Financial Services (DFS) for breaches of sanctions with Iran. The UK fund manager, which declined to be named, said that it discussed the allegations in general as well as compliance issues.  (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…)

Learn the compliance lessons from an epic fail in correspondent banking and trade finance

By Kim R. Manchester, Thomson Reuters Accelus contributing author

NEW YORK, July 16 (Thomson Reuters Accelus) - A Settlement Agreement was released in June 2012 by the United States Department of the Treasury regarding the voluntary self-disclosure to the Office of Foreign Assets Control (OFAC) by ING Bank, N.V. (ING Bank), a financial institution registered and organized in the Netherlands. The violations of numerous sanctions programs imposed by the United States against Cuba, Burma, the Sudan, Libya and Iran were determined by the Americans as “egregious.” (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…)

Corporate investigations are getting riskier and more difficult, experts say

By Stuart Gittleman

NEW YORK, May 29 (Thomson Reuters Accelus) - U.S. corporate officers and directors are increasingly concerned over the business and legal challenges their entities face from potential securities enforcement and criminal probes, lawyers and corporate officers are saying.

A program last week analyzed how directors, executives and corporate counsel can appropriately manage the business and legal risks of an enforcement proceeding arising from earnings misstatements or employee misconduct at both low and high levels.  (more…)

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