Compliance & Ethics

The U.S. Department of Justice recently announced a settlement with EagleBank, which agreed to pay more than $9.7 million after admitting it willfully failed to maintain an anti-money laundering and countering the financing of terrorism (AML/CFT) program required under the Bank Secrecy Act. The resolution comes in the form of a non-prosecution agreement covering conduct that stretched from 2010 through 2021.

The market had been told to expect a profitable year. On Feb. 28, 2023, Regional Express Holdings assured investors it remained "optimistic the Group will have positive operating profits for the full FY23 barring any further external shocks." Four months later, that confidence had dissolved into a forecast of a $24.2 million (AUD $35 million) operating loss. The question before the Supreme Court of New South Wales was not whether Rex's fortunes had changed. Businesses disappoint their own expectations all the time. The question was when the company knew its optimism no longer rested on reasonable grounds, and whether investors should have been told sooner.

If an app developer builds a product and acquires a customer, who owns that relationship? The developer who created the service, or the platform that stands between the two? The UK's Competition and Markets Authority believes the answer has drifted too far toward the latter.

Australia's financial intelligence agency has released a series of new threat assessments that argue the challenge facing anti-money laundering and counter-terrorism financing professionals is no longer simply identifying suspicious transactions. Increasingly, the reports suggest, the greater difficulty lies in recognizing illicit activity that has been carefully embedded within legitimate commerce.

The UK Financial Conduct Authority published the final rules governing firms that buy, trade, safeguard and issue cryptoassets, completing the policy framework that will underpin the country's new regulatory regime. The package reaches well beyond anti-money laundering controls and financial promotions, bringing prudential requirements, market conduct standards and consumer protections into a sector that has long operated under a narrower form of oversight.

Section 609(e) of the Fair Credit Reporting Act requires businesses to provide victims with records of fraudulent transactions so they can piece together what was done with their personal information and begin repairing the damage. According to the Federal Trade Commission, Amazon too often turned that straightforward legal obligation into something far more difficult.

There is a moment in almost every regulatory framework when compliance ceases to be the interesting question. The forms have been completed and the governance structures exist. Policies have been approved, committees have met, and someone can demonstrate that every required process was followed. Yet consumers can still end up with products that were never truly designed for them. Regulation, at its most useful, begins where documentation stops.