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August 2020 note from CEO

In the last month or so there was so much media coverage of financial crime issues that I can’t recall a busier month this year.

It is clear from the mainstream and social media coverage that there is growing public interest in financial crime and the important role that regulated financial and gaming companies have in ensuring they are not exploited by criminals to launder the proceeds of crime.

On the international stage we first had the $3bn settlement from Goldman Sachs related to the 1MDB scandal that saw the Malaysian Prime Minister Najib Razak jailed for 12 years and a hefty £39 million fine.

Then Deutsche Bank received a USD$150m fine for “significant compliance failures” leading to “mistakes and sloppiness” in failing to “properly monitor” it’s relationship with disgraced financier and convicted sex offender Jeffrey Epstein. (see blog below)

This could just be the tip of the iceberg as the Attorney General of the US Virgin Islands recently subpoenaed records from at least 10  financial institutions – including Deutsche Bank, JPMorgan Chase and Citibank, seeking  account records, transaction details and communications concerning Epstein, his estate, and more than 30 corporations, trusts and nonprofit entities connected to him.

On the domestic front, Westpac was in the news for making an ASX disclosure that it now thinks it failed to report 175,000 threshold transaction reports, which is nearly double the original estimate of 60,000 to 90,000 transactions (see blog below).  This disclosure to the ASX was after they released the Westpac Culture, Governance and Accountability Reassessment Report on 17 July.

Also, in the news domestically, James Packer’s Crown Resorts were in facing the NSW Independent Liquor and Gaming Authority’s inquiry which is investigating revelations by The Age, Sydney Morning Herald and 60 Minutes that Crown went into business with “junket” tour operators linked to organised crime and was used to launder suspected drug money.

These recent reports highlight the importance that regulated entities have in combating financial crime and it would seem that there is still a long way for many organisations to go to implement and maintain effective risk and compliance controls to manage financial crime risks.

Earlier this month the Monetary Authority of Singapore issued its information paper on “enhancing the robustness of enterprise financial crime risk assessments on money laundering and terrorism financing risks”, which is focussed around 6 desired outcomes all of which can be met by the use of financial crime risk assessment technology.

Read more on recent banking sector financial news here.

Safe safe everyone!

Anthony Quinn, Founder & CEO Arctic Intelligence

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