Audit & Governance Weekly Financial News 2nd October 2020

Company News

Published on: Friday, October 2, 2020 by Paul Stanbridge

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Hi *|FNAME|*

AML and Fraud dominate the news this week, with record fines in the U.S. and long term criminal activity haunting the markets.

First a few updates…

FCA – Appointed Representatives Concerns:
The FCA has highlighted concerns with the way networks are overseeing their appointed representative (AR) firms (https://www.mortgagesolutions.co.uk/news/2020/09/30/fca-warns-about-network-oversight-of-ars-across-financial-services/) across the financial advice industry and it could have implications to other FS sectors..

Crypto regulation:
As Britain’s youngest Crypto founder was charged with AML this week (see below), Bloomberg reported that the booming world of decentralized finance has collected more than $11 billion in cryptocurrencies (https://www.bloomberg.com/news/articles/2020-10-01/booming-crypto-market-a-potential-haven-for-money-laundering) in a matter of months (https://www.bloomberg.com/news/articles/2020-10-01/booming-crypto-market-a-potential-haven-for-money-laundering) and is a potential haven for money laundering, according to new research.

Big 4 Audit Partners Pay:
Deloitte partners’ pay to fall 17% (https://www.ft.com/content/c72c35c8-67a0-4845-8d8d-cddddb37db8a) despite revenue boost reports the FT. Although it shouldn’t hurt too much as last year the Guardian reported Deloitte UK partners (https://www.theguardian.com/business/2019/aug/27/deloitte-uk-partners-in-line-for-biggest-payday-in-10-years-accounting) were in line for biggest payday in 10 years with many handed more than £1m….

Wirecard Update:
WC fraud was flagged by EY staff four years before it fell according to an investigation by theFinancial Times (https://citywire.co.uk/wealth-manager/news/wirecard-fraud-was-flagged-by-ey-staff-four-years-before-it-fell/a1406925) . A probe by fellow auditor KPMG has found that an internal whistle-blower at EY flagged potentially fraudulent practices at the business back in 2016, as well as an alleged attempt to bribe an auditor in India.

And lastly….
Rhymes to prevent Crimes. Poems are the latest weapon (https://www.dailyrecord.co.uk/lifestyle/money/santander-reports-75-investment-fraud-22765279) in the fightback against bank fraud at Santander.

Enjoy this weeks edited news below.

Many thanks

Paul
In the news this week…
US – JPMORGAN TO PAY $920M IN LARGEST EVER SPOOFING SETTLEMENT

Regulators deliver blunt warning to banks to clamp down on high-speed financial market manipulation or risk blockbuster fines and criminal convictions for staff … read more (https://theunionjournal.com/us-regulators-step-up-battle-with-spoofing/)
US – US CHARGES BITCOIN EXCHANGE FOUNDERS OVER MONEY LAUNDERING

Charges are the latest in a years long effort by the US to crackdown on cryptocurrency market that was once largely unregulated… read more (https://www.telegraph.co.uk/news/2020/10/01/britains-youngest-billionaire-bitcoin-exchange-co-founder-charged/)
ELECTRONIC TRADING – US SEC PROPOSES NEW RULES TO ALLEVIATE RISK TO FIXED-INCOME MARKET

The new rules for US Treasuries, corporate debt and municipal securities, are aimed at improving transparency and ops preparedness … read more (https://uk.reuters.com/article/idUKKBN26J2WK)
RISK – UNSETTLING TIMES: WHY IS SETTLEMENT RISK ON THE RISE?

Regulators and market participants searching for answers after BIS figures show substantial increase .. read more (https://www.risk.net/risk-management/7690991/unsettling-times-why-is-settlement-risk-on-the-rise)

UK FRAUD – SFO CHARGES 5 WITH FRAUD AT STEEL TRADER BALLI

UK: Serious Fraud Office take five to court over allegations of fraud relating to collapse of Balli, the Anglo-Iranian steel trader … read more (https://www.ft.com/content/b91965f9-6507-4b15-8927-3bdcbaf10226)

HSBC AML – HSBC’S SHARES DIVE TO LOWEST LEVEL SINCE 1995 AMIDST MONEY LAUNDERING CLAIMS

Leaked files show bank allowed fraudsters to transfer millions of dollars around the world even after it had learned of their scam… read more (https://www.bbc.co.uk/news/business-54230733)
PRIVATE BANKING – FIVE GROUPS OUSTED FROM UN-BACKED RESPONSIBLE INVESTMENT LIST

Five investors removed from the United Nations backed Principles for Responsible Investment, including private banking arm of France’s La Banque Postale… read more (https://www.reuters.com/article/us-global-investments-pri-exclusive-idUSKBN26J0T9)
JERSEY FIN CRIME – ‘SIGNIFICANT’ THREAT OF OVERSEAS FINANCIAL CRIME IN JERSEY

The National Risk Assessment of Money Laundering is the first study of its kind and has been made public by the Government of Jersey…. read (https://www.bbc.co.uk/news/world-europe-jersey-54353356) more (https://www.bbc.co.uk/news/world-europe-jersey-54353356)
SPAIN FRAUD – SPAIN BANKIA TRIAL: THIRTY-FOUR CLEARED OF BANK PRIVATISATION FRAUD

Former head of Spain’s Bankia bank, Rodrigo Rato, and 33 other defendants acquitted of defrauding investors and false accounting… read more (https://www.bbc.co.uk/news/world-europe-54338784)
EU – CAPITAL MARKETS UNION: COMMISSION TO BOOST EUROPE’S CAPITAL MARKETS

The European Commission published ambitious Action Plan to boost the the Capital Markets Union over the coming years…. read more (https://ec.europa.eu/commission/presscorner/detail/en/IP_20_1677)

** Hiring for your Internal Audit team?
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We have an extensive network of immediately available Internal Audit candidates. Call Paul on 0203 397 1774
Paul Stanbridge
Before establishing Fleet Search and Selection with Craig Phipps, Paul worked as an Equity Research Analyst in London. Now, a recruitment consultant for almost two decades, he has recruited many senior roles, including Global Heads of Audit and C-Suite executives. His wide network spans Insurance, Asset Management and Banking, with expertise including Audit, Compliance and Advisory.
As with his day job, Paul likes getting people excited about things. He is a passionate competitive foil fencer with 5 caps for Scotland and now enjoys coaching others to enjoy fencing too.
Contact:
[email protected] (mailto:[email protected])
Craig Phipps

Craig has spent over 20 years recruiting for the Financial Services Industry, predominately in Business and Technology Audit for Investment Banks and Asset Managers. He has also recruited extensively in Market Risk and Quantitative finance. Prior to establishing Fleet Search and Selection, he headed up the Investment Banking Audit and IT Audit Divisions at two prominent recruitment companies.
Craig has helped 100’s of candidates make difficult career choices. When not at work, his strategic mindset turns to his passions for skiing and rugby and is a huge supporter of Australia’s national rugby team.
Contact:
[email protected] (mailto:[email protected])

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