HSBC to Pay $765M in Toxic RMBS Settlement

HSBC has agreed to pay $765 million to settle U.S. allegations that it sold toxic residential mortgage-backed securities before the financial crisis, resulting in “significant losses” to investors.In announcing the deal on Tuesday, the Department of Justice said the London-based bank misrepresent...

By Matthew Heller • Oct. 11, 2018

How to Make Sure You Can Trust Your AI

We know artificial intelligence will remake — is already in the process of remaking — both business and the broader world beyond. What we don’t know yet is what unintended consequences AI will wreak as it becomes more advanced and commonplace.One hindrance to envisioning that future is that AI is...

By David McCann • Oct. 5, 2018

Compliance Functions Lag on Tech Savvy

A majority of compliance functions at financial institutions are following one of three distinct paths aimed at achieving sustainable risk management in the fast-evolving digital age. However, only one path is likely to optimize success.Banks, capital markets firms, and insurers are investing in ...

By David McCann • Sept. 20, 2018

Florence Poses No Big Threat to Insurers

The commercial insurance industry is bracing for losses following the destruction that Hurricane Florence will wreak in the Carolinas, and perhaps beyond, over the next few days.But no matter what happens, the industry is not likely to suffer more than a glancing blow — a testament to its fiscal ...

By David McCann • Sept. 13, 2018

Regulator Continues Crypto Asset Crackdown

The U.S. Securities and Exchange Commission has broken new regulatory ground by charging a hedge fund manager and the owners of TokenLot with registration violations related to digital assets.The SEC’s case against TokenLot, a self-described “ICO Superstore,” is its first charging unregistered br...

By Matthew Heller • Sept. 12, 2018

Risk Psychology Invites Exposure to Black Swans

With weather events swirling and cyber-hackers swarming, CFOs need to keep a clear head and have a coherent risk strategy.Too often, however, companies fail to take to take proper precautions against Black Swans — outlier events, like last year’s extreme flooding in Houston. Their occurrence isn’...

By Frank Licata • Sept. 11, 2018

SEC Halts Trading in Bitcoin Tracking Products

In another move that highlights U.S. regulators’ concerns over Bitcoin exchange-traded funds, the U.S. Securities and Exchange Commission has suspended trading in two investment products that track cryptocurrencies.Bitcoin Tracker One and Ether Tracker One were launched in U.S. public markets las...

By Matthew Heller • Sept. 10, 2018

Nike Likely to Win with Bold Kaepernick Move

As we recently pointed out, companies are growing more emboldened to take stances on social and political issues — and accept the accompanying risks — during this divisive era in American history.The topic has, of course, exploded in the news this week, with Nike’s revelation of its new marketing...

By David McCann • Sept. 6, 2018

Ex-Playgirl Owner Accused of $287M Fraud

The former owner of Playgirl magazine has been charged with fraudulently raising $287 million for a cash-advance business that actually served as a source of cash for his other companies and his own lavish lifestyle.The U.S. Securities and Exchange Commission said Carl Ruderman perpetrated a four...

By Matthew Heller • Aug. 30, 2018

Moody’s Fined $16M Over Rating Deficiencies

Moody’s Investors Service has agreed to pay more than $16 million to settle allegations that it failed to ensure the accuracy of statistical models used in its ratings and apply rating symbols consistently.The U.S. Securities and Exchange Commission on Tuesday said the credit rating agency’s qual...

By Matthew Heller • Aug. 28, 2018

Oil Firm Founder Settles Charges of ICO Fraud

The founder of an oil and gas exploration company has settled allegations that he attempted to raise $5 million from investors through an initial coin offering he promoted with misleading marketing materials.The U.S. Securities and Exchange Commission said David T. Laurance and his Tomahawk Explo...

By Matthew Heller • Aug. 15, 2018

RBS to Settle RMBS Claims for Record $4.9B

Royal Bank of Scotland Group has settled another case arising out of its sale of toxic mortgage-backed securities for a record amount, agreeing to pay the U.S. $4.9 billion.The Justice Department said the penalty was the largest it had ever imposed for financial crisis-era misconduct at a bank un...

By Matthew Heller • Aug. 15, 2018

Brand Risk Soars in Today’s Social & Political Climate

“The country is divided, and companies are not getting away unscathed.”So says Peter Horst, a former chief marketing officer with several large companies, including Capital One and Hershey. His new book, “Marketing in the #FakeNews Era” (Advantage Media Group, May 2018), carries the tagline, “New...

By David McCann • Aug. 15, 2018

Monsanto Cancer Verdict Rattles Bayer Shares

Shares of German pharmaceutical giant Bayer plunged on Monday as analysts predicted a “litigious headache” in the wake of a $289 million jury award in a cancer exposure case against its Monsanto subsidiary.The case of a California school groundskeeper who alleged exposure to Monsanto’s glyphosate...

By Matthew Heller • Aug. 14, 2018

Some Companies Are Ignoring GDPR Risk

During the six-year lead-up to the May 25, 2018, effective date of the European Union’s General Data Protection Regulation (GDPR), much attention was focused on the onerous financial penalties for noncompliance.The maximum penalty is so big that it almost defies comprehension: 4% of an offending ...

By David McCann • Aug. 9, 2018

Arista Settles Cisco’s Patent Claims for $400M

Arista Networks has agreed to pay Cisco Systems $400 million as part of a settlement of litigation that has pitted the two computer networking companies against each other for nearly four years.In return for the payment, Cisco will drop all its pending patent infringement claims against Arista. T...

By Matthew Heller • Aug. 7, 2018

SEC Deals Another Setback for Bitcoin ETF

The U.S. Securities and Exchange Commission has rejected another effort by entrepreneurs Cameron and Tyler Winklevoss to list a bitcoin-related exchange-traded fund, citing concerns that the price of bitcoin is susceptible to manipulation.The Winklesvoss twins had proposed an SEC rule change that...

By Matthew Heller • July 30, 2018

Fyre Festival Promoter Settles Fraud Charges

The organizer of an ill-fated music festival in the Bahamas has settled charges that he defrauded investors in the Fyre Festival and two other media businesses of more than $27 million.The U.S. Securities and Exchange Commission said William “Billy” McFarland — with the aid of two associates — in...

By Matthew Heller • July 25, 2018

Mizuho Fined Over Handling of Buyback Orders

The U.S. securities trading unit of Japan’s Mizuho Bank has been fined $1.25 million for failing to prevent material nonpublic information about clients’ stock buybacks from being disclosed to other traders and to hedge fund clients.The U.S. Securities and Exchange Commission said Mizuho Securiti...

By Matthew Heller • July 23, 2018

EU Fines Google $5B Over Android Restrictions

The EU’s antitrust regulator has fined Google a record 4.3 billion euros ($5.03 billion) over anticompetitive practices aimed at ensuring it dominates the search engine market on Android mobile devices.After a long-running investigation, the European Commission said Wednesday it had concluded tha...

By Matthew Heller • July 18, 2018

Regulators to ‘Vigilantly’ Monitor Crypto-assets

Global financial regulators don’t see any imminent risk to financial stability from crypto-assets but have identified an analytical framework to monitor them “vigilantly.”In a report released on Monday, the Financial Stability Board, which coordinates financial regulation for the Group of 20 Econ...

By Matthew Heller • July 17, 2018

Ex-Tesla Worker Alleges Production Irregularities

A former Tesla technician has filed a whistleblower complaint with the U.S. Securities and Exchange Commission alleging the automaker has used defective batteries in its cars and inflated production numbers.Martin Tripp’s complaint was the latest salvo in a legal battle that began last month when...

By Matthew Heller • July 16, 2018

Ex-Heartland CEO Charged With Insider Trading

The former CEO of Heartland Payment Systems has been charged with collaborating in an insider trading scheme with his longtime girlfriend that generated more than $250,000 in illicit profits.According to the U.S. Securities and Exchange Commission, Robert Carr tipped off Katherine Hanratty to the...

By Matthew Heller • July 11, 2018

Ratings Analyst Accused of Insider Trading

An analyst at a major credit ratings agency has been accused of tipping off two friends about an impending acquisition by a client, enabling them to make nearly $300,000 in illicit stock trading profits.The U.S. Securities and Exchange Commission said Sebastian Pinto-Thomaz learned of paint compa...

By Matthew Heller • June 27, 2018

JPMorgan Fined $65M Over ISDAFix Rigging

JPMorgan Chase has agreed to pay $65 million to settle charges that its traders attempted to rig a global benchmark for interest rate products to benefit its derivatives positions.The U.S. Commodity Futures Trading Commission said Monday that the bank attempted to manipulate the U.S. Dollar Inter...

By Matthew Heller • June 19, 2018