The article in the url below is interesting in the consequences it potentially has for a firm's Compliance Officer (CO):
"A U.S. District Court in Minnesota ruled that compliance officers and other individuals can be held responsible for anti-money laundering control failures under the Banking Secrecy Act, dealing a setback to a former chief compliance officer [MoneyGram Chief Compliance Officer Thomas Haider] who was hit with a $1 million fine by the Financial Crimes Enforcement Network [FinCEN]."
In other words, as a result of this ruling, not only is it the CO's responsibility to put in place the rules and culture to try and prevent corruption from occurring (either within the firm or in relation to the firm's dealings with external stakeholders), but the individual him/herself is potentially liable for any failure to do so:
"In the case against Mr. Haider, … defense lawyers challenged the ability of FinCEN to levy an individual penalty under the provisions it cited in the Banking Secrecy Act. … In his denial of a motion to dismiss, U.S. District Court Judge David Doty ruled that the provision of the act that requires institutions establish money laundering programs is governed by the act's broader civil penalty provision, which allows penalties against a 'partner, director, officer, or employee.' 'The plain language of the statute provides that a civil penalty may be imposed on corporate officers and employees like Haider, who was responsible for designing and overseeing MoneyGram's AML program,' Mr. Doty wrote."
This ruling is in-line with a September 2015 announcement by the Department of Justice that, in future, it plans to begin holding individuals to account for white-collar corporate wrongdoings, rather than relying on deferred prosecution agreements (where a firm is fined without admitting fault). The DoJ's memo to prosecutors announcing this shift can be downloaded at: http://www.justice.gov/dag/file/769036/download
Take care
David
David Chandler & Bill Werther
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Court Rules Anti-Money Laundering Law Applies to Compliance Officers
By Stephen Dockery
January 13, 2016
The Wall Street Journal
