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The Value of Integrating News Awareness into Corporate Compliance and Risk Management

  • May 26, 2018
The case of Michael Cohen, “personal lawyer” to the U.S. President, continues to yield rich legal, compliance and risk management lessons for a growing group that includes U.S. and foreign companies, banks, lobbyists, government officials, and lawyers. Recent developments in the Cohen matter highlight how news awareness can enhance compliance and risk management for companies and others. Unlike AT&T and Novartis, most companies will not find themselves entangled in headline news of national importance, but enough of them are likely to get caught flat-footed by news about them or their business partners and peers (such as in the same industry, where news of one company’s bad behavior can lead law enforcement authorities to scrutinize peer companies in industry sweeps).
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Hdeel Abdelhady Discussed the Michael Cohen Matter on MSNBC

  • May 12, 2018
Hdeel Abdelhady joined MSNBC's Ari Melber on May 9 to discuss developments in the Michael Cohen case, including Michael Avenatti's report purporting to contain details of Cohen's transactions with Novartis, AT&T, Viktor Vekselberg and others. Watch the segment here: MassPoint's Hdeel Abdelhady on The Beat With Ari Melber
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Michael Cohen and a Curiously Public Suspicious Activity Report

  • April 22, 2018
Following reports this week that the FBI executed search warrants at Cohen’s law offices, hotel room and home and seized “business records, emails and documents related to several topics, including a payment to” Stormy Daniels, the Wall Street Journal revisited the Cohen-linked Suspicious Activity Report, writing that First Republic Bank had “conducted its own investigation” of the Stormy Daniels transaction “after receiving the subpoena from the authorities.”From a legal perspective, these and similar news reports are striking for the legal question that they raise: How did the existence of the Suspicious Activity Report become public? By law, banks and certain other financial institutions are required to have in place systems to detect and deter money laundering, terrorism financing and other financial crime. Banks and certain other financial institutions are required by law to file Suspicious Activity Reports with respect to certain criminal violations or where a transaction appears to have no lawful purpose, is inconsistent with a customer's ordinary behavior and/or is in other ways suspicious (as indicated in a relevant section of the FFIEC Bank Secrecy Act manual below).
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FinCEN Guidance on Customer Due Diligence (CDD) Rule 2018

  • April 10, 2018
The Financial Crimes Enforcement Network (FinCEN) on April 3, 2018 published guidance on the Customer Due Diligence Requirements for Financial Institutions rule (the "CDD Rule) that will come into effect on May 11, 2018. FinCEN's CDD Guidance, in the form of frequently asked questions, is comprised of 36 questions and answers covering a range of issues, from the scope of due diligence up the ownership chain of legal entities to due diligence requirements applicable (or not) to foreign banks.
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Wolfsberg Group Revised Correspondent Banking Due Diligence Questionnaire (2018)

  • March 9, 2018
The Wolfsberg Group first announced the release of the CBDDQ in 2017. However, the Group did not make the CBDDQ widely available. After initially announcing the CBDDQ, the Wolfsberg Group held back after deciding that the CBDDQ should be published more widely “once an additional set of materials has been completed . . . in order to limit the ability of third parties to interpret what it is that the Group intended with the DDQ and who it was directed to.”
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Banks, Credit Unions and Other Financial Insitutions as Deputized Law Enforcement

  • September 27, 2017
The logic and law enforcement value of imposing anti-financial crime obligations on financial intermediaries are clear. Nevertheless, a reassessment is now appropriate, particularly given (1) increasing legal and regulatory demands on financial intermediaries; (2) the exclusion, through “derisking,” from the financial system of small and medium businesses (SMEs), nonprofit organizations, money services businesses (MSBs), and correspondent relationship-dependent banks; and, (3) overarching questions as to whether the financial and administrative costs of compliance within the current legal framework—generally or at specific points—yield commensurate law enforcement benefits without unduly harming the legitimate interests of individuals, businesses and other financial system stakeholders.
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FinCEN Expands Geographic Targeting Orders

  • August 31, 2017
On August 22, 2017, the Financial Crimes Enforcement Network (FinCEN) issued revised Geographic Targeting Orders (GTOs) designed to combat money laundering and related financial crimes in select U.S. residential real estate markets. The GTOs further expand the scope of GTOs issued in January 2016, expanded in July 2016, and renewed in February 2017. In tandem with the August GTOs, FinCEN issued an Advisory to Financial Institutions and Real Estate Firms and Professionals (the “Advisory”) and FAQs.
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FinCEN Expands Geographic Targeting Orders to Include Funds Transfers and Hawaii Real Estate

  • August 31, 2017
On August 22, 2017, the Financial Crimes Enforcement Network (FinCEN) issued revised Geographic Targeting Orders (GTOs) designed to combat money laundering and related financial crimes in select U.S. residential real estate markets. The GTOs further expand the scope of GTOs issued in January 2016, expanded in July 2016, and renewed in February 2017. In tandem with the August GTOs, FinCEN issued an Advisory to Financial Institutions and Real Estate Firms and Professionals (the “Advisory”) and FAQs.
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Correspondent Banking and Derisking Update

  • July 5, 2017
Ahead of the upcoming G20 meeting, the Financial Stability Board (FSB) published today, July 4, 2017, a progress report on efforts to address the withdrawal of correspondent banking relationships (derisking) and its action plan to assess and address derisking. Among the areas of concern and action items identified by the FSB are remittances and building the capacity of affected respondent bank jurisdictions to effectively identify and counter money laundering, terrorism finance, and other illicit financial activities. Importantly, the FSB has stated that its efforts will focus not just on legislation and rule-making in respondent jurisdictions, but also on the capacity of those jurisdictions to implement and enforce stronger AML/CFT and other anti-financial crime rules.
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Sovereign Commercial Enterprises: Anti-Corruption and Confidentiality Risks

  • July 3, 2017
State-owned enterprises (SOEs, including sovereign wealth funds) are prominent players in international business. Given their ownership, SOEs have garnered scrutiny for their lack of transparency and heightened anti-corruption and anti-money laundering risk, as have individual SOE executives and other personnel who qualify as Politically Exposed Persons. In connection with commercial activities, SOEs are not protected in most cases by sovereign immunity. Thus, SOEs can, like their privately-owned counterparts, be subject to foreign legal processes. Given the greater scrutiny around SOEs and some of the high profile enforcement actions involving them directly or indirectly (for example, the 1MDB case), anti-corruption and other compliance, as well as good governance and risk management, are essential to avoid legal, commercial, and reputational risk and loss.
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