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Risk Management: Considering What’s at Stake

January 21, 2016
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Risk Management: Considering what’s at stake, why would you settle for anything less than the most complete coverage

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Risk Management

A U.S. District Court ruled that compliance officers and other individuals can be held responsible for anti-money laundering control failures under the Bank Secrecy Act. A recent Wall Street Journal article, talks about how this ruling dealt a setback to a former chief compliance officer who was hit with a $1 million fine by FinCEN. Thomas Haider the former compliance officer for Moneygram was unable to convince a federal judge that a $1 million penalty for accusations that he failed to prevent money laundering should apply only to the company.

In a U.S Department of Justice Release, Manhattan U.S. Attorney Bharara, said: “Compliance officers perform an essential function in our society, serving as the first line of defense in the fight against fraud and money laundering. Unfortunately, Mr. Haider, violated his obligations by failing to ensure that they: (1) implemented and maintained an effective anti-money laundering (“AML”) program; and (2) filed timely suspicious activity reports with law enforcement when it knew, suspected, or had reason to suspect that third parties were using its money transfer service to facilitate criminal activity.”

The District Court ruling follows soon after the December 2015 announcement of the new proposed regulation in New York to require an annual certification of the CCO or functional equivalent that your program is risk based and complies with all the detailed requirements of the regulation and that they use BSA/AML detection scenarios based on the Risk Assessment to detect potential money laundering or other suspicious activities. Many are speculating that other regulators will be following New York’s example.

To read the new requirements click here:

Wall Street Journal January 13th 2016: http://blogs.wsj.com/riskandcompliance/2016/01/13/court-rules-anti-money-laundering-law-applies-to-compliance-officers/

United States Department of Justice Release December 18, 2014: http://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-sues-thomas-e-haider-former-chief-compliance-officer-moneygram

New York Banking Division Transaction Monitoring And Filtering Program Requirements And Certifications: http://www.dfs.ny.gov/legal/regulations/proposed/rp504t.pdf

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