Greg Kilminster
Head of Product - Content
EBA report highlights progress in AML/CFT Colleges, but more needed
The European Banking Authority (EBA) has published its third report on the functioning of anti-money laundering and countering the financing of terrorism (AML/CFT) colleges. The report finds that competent authorities have taken important steps to improve the functioning of AML/CFT colleges, but that many colleges have not yet reached full maturity.
AML/CFT colleges are permanent structures that serve to enhance cooperation between different supervisors involved in the supervision of cross-border institutions. The report finds that competent authorities have made progress in establishing clear mandates and objectives for AML/CFT colleges, developing structured approaches to the exchange of information, and ensuring that all relevant stakeholders are involved in the colleges. However, the report also finds that many colleges have not yet held their first meeting, and that the sharing of relevant information remains insufficient in some colleges.
The report highlights good practices that could be useful for competent authorities to overcome these challenges and further improve the effectiveness of AML/CFT colleges going forward. These include:
- Establishing clear mandates and objectives for each college.
- Developing a structured approach to the exchange of information.
- Ensuring that all relevant stakeholders are involved in the college.
- Regularly reviewing the effectiveness of the college.
The report also recommends that the EBA continue to monitor the functioning of AML/CFT colleges and to provide support to competent authorities in their efforts to improve their effectiveness.
The EBA’s report is a positive development, as it highlights the progress that has been made in improving the functioning of AML/CFT colleges. However, it also identifies areas where further progress is needed. By following the good practices outlined in the report, competent authorities can further improve the effectiveness of AML/CFT colleges and help to ensure that the financial system is protected from money laundering and terrorist financing.
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Former bank board members plead guilty to fraud
Three former board members of the failed Washington Federal Bank for Savings in Chicago have pleaded guilty to conspiring to falsify bank records and obstruct a federal investigation.
William M Mahon and George F Kozdemba pleaded guilty to the conspiracy charge during a hearing on 8th August 2023. Janice M Weston pleaded guilty to the conspiracy charge the previous week.
The three former board members admitted that they conspired to falsify bank records in order to deceive the Office of the Comptroller of the Currency (OCC) during its examination of Washington Federal in the months leading up to the bank’s collapse. They made false entries in bank records and provided them to the OCC with the intent to deceive the agency and obstruct its examination. They also falsified records to make it appear that Washington Federal was operating in compliance with banking rules and internal policies and controls.
The three former board members face up to five years in prison for the conspiracy charge. Mahon also faces up to three years in prison for the tax offence. Sentencing is scheduled for October and December.
In addition to the three former board members, 13 other individuals have been charged in connection with the Washington Federal fraud scheme. Eight of those individuals have pleaded guilty or entered into agreements to cooperate with the government. The case is being investigated by the Federal Bureau of Investigation and the Office of the Comptroller of the Currency.
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SFC tribunal finds Mayer Holdings and former executives guilty of inside information failure
The Market Misconduct Tribunal (MMT) of Hong Kong’s Securities and Futures Commission has found that Mayer Holdings Limited (Mayer) and nine of its former senior executives failed to disclose inside information as soon as reasonably practicable as required under the Securities and Futures Ordinance (SFO).
The MMT’s decision follows remitted proceedings after the Court of Appeal allowed appeals by Mayer and its directors against an earlier determination by the MMT.
In the remitted proceedings, the MMT found that Mayer had no written guidelines and/or internal control policies on the statutory requirements to disclose inside information. This resulted in the breach of the disclosure requirement imposed on it under the SFO.
The MMT also found that the nine former senior executives had also breached the disclosure requirement imposed on them under the SFO, in that their intentional, reckless, or negligent conduct resulted in the breach of the disclosure requirement by Mayer; and/or that they had not taken all reasonable measures to ensure proper safeguards existed to prevent the breach.
The Executive Director of Enforcement of the Securities and Futures Commission, Mr Christopher Wilson, said: “Senior executives of listed companies are responsible for ensuring appropriate and effective internal controls are in place for compliance with relevant disclosure requirements under the SFO. This is because timely disclosure of inside information is crucial to the orderly operation of the securities market and the maintenance of a fair and informed market.”
The MMT will determine the sanctions against Mayer and its former senior executives in a later hearing on a date to be fixed.
This case is a reminder to compliance teams of the importance of having clear and comprehensive internal controls in place to ensure that inside information is disclosed in a timely manner. Compliance teams should also be aware of the risks associated with not having effective internal controls, as this could lead to significant penalties for both the company and its executives.
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