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Banker's Toolbox, Inc., leaders in compliance solutions for financial institutions, announced the acquisition of Georgia-based MainStreet Technologies (MST). MST is an industry leader in the loan risk management space. This acquisition adds to a strong and growing portfolio of compliance-related solutions and will continue to enhance the value Banker's Toolbox brings to both their customers and the industry. (Read full press release here.)

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OCC supervision plan for FY 2019

The Office of the Comptroller of the Currency has released its bank supervision operating plan for fiscal year 2019. Supervisory strategies for FY 2019 focus on:

  • cybersecurity and operational resiliency.
  • commercial and retail credit loan underwriting, concentration risk management, and the allowance for loan and lease losses.
  • Bank Secrecy Act/anti-money laundering (BSA/AML) compliance management.
  • compliance-related change management to address regulatory requirements.
  • internal controls and end-to-end processes necessary for product and service delivery


OFAC targets Maduro's inner circle and corruption proceeds

The Office of Foreign Assets Control has designated four members of Venezuelan President Nicolas Maduro’s inner circle, including First Lady and former Attorney General and President of the National Assembly Cilia Adela Flores de Maduro. OFAC also targeted a network supporting a key front man for designated President of Venezuela’s National Constituent Assembly, Diosdado Cabello Rondon, and identified as blocked property a $20 million U.S.-based private jet as belonging to Cabello’s front man. Identity information on the designated individuals, entities and the plane can be found in our OFAC Update.


New HIDTAs added by Office of National Drug Control Policy

The Office of National Drug Control Policy has announced the designation of ten new areas across Kentucky, New Jersey, North Carolina, Ohio, Pennsylvania, South Carolina, and West Virginia as High Intensity Drug Trafficking Areas (HIDTAs). This designation enables the 10 areas to receive Federal resources to further the coordination and development of drug control efforts among Federal, State, local, and tribal law enforcement officers, and allows local agencies to benefit from ongoing HIDTA initiatives that are working to reduce drug trafficking across the United States. Financial institutions also take HIDTAs into account in their periodic assessments of money laundering risk.The added areas include:

  • Allegheny, Beaver, and Washington Counties in Pennsylvania as part of the Ohio HIDTA
  • Atlantic County in New Jersey as part of the Liberty Mid-Atlantic HIDTA
  • Butler County in Ohio as part of the Ohio HIDTA
  • Charleston County in South Carolina and the Eastern Band of Cherokee Indian Reservation in North Carolina as part of the Atlanta/Carolinas HIDTA
  • Mineral County in West Virginia as part of the Washington/Baltimore HIDTA
  • Montgomery and Powell Counties in Kentucky as part of the Appalachia HIDTA


FinCEN advisory on FATF update

FinCEN Advisory FIN-2018-A004 responds to FATF's updated list of jurisdictions with strategic anti-money laundering/counter-terrorist financing (AML/CFT) deficiencies. Iraq and Vanuatu have been removed from the list and are no longer subject to the FATF’s monitoring process under their ongoing global AML/CFT compliance processes. Pakistan has been added to the list and will undergo monitoring by FATF’s International Co-operation Review Group based on the specific AML/CFT deficiencies highlighted by the FATF.

FATF also issued a "public statement" on North Korea and Iran, indicating that those countries have strategic deficiencies in their AML/CFT regimes and calling upon FATF members and urging all jurisdictions to (1) impose countermeasures and/or (2) apply enhanced due diligence proportionate to the risks arising from North Korea and Iran.


Reminder of Blocked Property Report

Treasury has posted a reminder that persons holding property blocked pursuant to OFAC sanctions regulations are required to provide OFAC with a comprehensive report on all blocked property held as of June 30 of the current year by September 30. The annual reports must be filed using the Annual Report of Blocked Property (ARBP) form. For more information see OFAC’s Guidance on Filing the ARBP.


New employer tax credit for paid family and medical leave

Treasury announced yesterday that, as part of the 2017 Tax Cuts and Jobs Act, eligible employers who provide paid family and medical leave to their employees during tax years 2018 and 2019 may qualify for a new business credit. Retroactive credit may also be available to employers for setting up or updating a leave policy. Eligible employers who set up qualifying paid family leave programs or amend existing ones may also be eligible to claim the employer credit for paid family and medical leave, retroactive to the beginning of the employer’s taxable year, for qualifying leave already provided. Guidance was also released clarifying how to calculate the credit, including the application of special rules and limitations. Generally, only paid family and medical leave provided to employees whose prior-year compensation was $72,000 or less qualify for the credit.


Florence urgent needs grants available to CUs

The NCUA has announced that low-income credit unions sustaining damage from Hurricane Florence are eligible for urgent needs grants up to $7,500 to help restore operations.


Saudi Arabia record in fighting terrorist financing

The Financial Action Task Force (FATF) and the Middle East and North Africa Financial Action Task Force (MENAFATF) jointly conducted an assessment of Saudi Arabia’s anti-money laundering and counter-terrorist financing (AML/CFT) system. The assessment is a comprehensive review of the effectiveness of a country’s AML/CFT system and its level of compliance with the FATF Recommendations. The Kingdom of Saudi Arabia is achieving good results in fighting terrorist financing, but needs to focus more on pursuing larger scale money launderers and confiscating their assets.


Bureau posts consumer budgeting strategies and free tools

The CFPB has posted an article for consumers regarding budgeting strategies and lists free tools to help them reach their goals. A budget worksheet is provided along with ways to stick the budget and taking control of finances.


Lender and appraisal company pay $240K for refinance discrimination

HUD has announced that LLC and Appraisal Management Services of America, Inc. agreed have to pay over $240,000 for allegedly refusing to refinance loans because of race and homes’ location on Native American lands.


OFAC extends expiration date of General Licenses

OFAC has announced its extension of the expiration date of certain general licenses related to EN+ Group plc and United Company RUSAL PLC. General Licenses 13D, 14A, and 16A have been amended to extend their expiration dates from October 23 to November 12, 2018, for transactions related to the companies and their subsidiaries.


Swap Margin Rule amendments approved

Five federal agencies (the Fed, FDIC, FHFA, OCC, and the Farm Credit Administration) have approved final amendments to swap margin requirements to conform with recent rule changes that impose new restrictions on certain qualified financial contracts of systemically important banking organizations (QFC Rules). Under the amendments, which will become effective 30 days after Federal Register publication, legacy swaps entered into before the applicable compliance date will not become subject to the margin requirements if they are amended solely to comply with the requirements of the QFC Rules.


Board requests comments on amendments to Regs H and K

The Federal Reserve Board has requested public comment on a proposal to amend Regulation H and Regulation K to repeal provisions that incorporate the Secure and Fair Enforcement for Mortgage Licensing Act (S.A.F.E. Act). The proposal reflects the transfer of the Board's rulemaking authority for the S.A.F.E. Act to the Bureau of Consumer Financial Protection. Entities that were subject to the Board's rules are now subject to the Bureau's rules. Comments on the proposal will be accepted for 60 days following publication in the Federal Register.

UPDATE: The proposal was published at 83 FR 48402 on 9/25/2018. Comments are due by 11/26/18.


Second quarter mortgage performance unchanged

The OCC has released its Mortgage Metrics Report for the Second Quarter 2018, which showed 95.6 percent of mortgages included in the report were current and performing at the end of the quarter, compared to 95.4 percent a year earlier. The report also showed that servicers initiated 29,612 new foreclosures during the second quarter of 2018­, a 20.6 percent decrease from the previous quarter and a 17.7 percent decrease from a year ago. Servicers implemented 32,655 mortgage modifications in the second quarter of 2018, and 64.1 percent of the modifications reduced borrowers’ monthly payments.

The first-lien mortgages included in the OCC’s quarterly report comprise 33 percent of all residential mortgages outstanding in the United States or approximately 17.5 million loans totaling $3.28 trillion in principal balances.


All consumers can place free credit card freezes

The Federal Trade Commission and the Bureau of Consumer Financial Protection have announced that effective Friday, September 21, 2018, consumers concerned about identity theft or data breaches can freeze their credit and place one-year fraud alerts for free. Under the new Economic Growth, Regulatory Relief, and Consumer Protection Act, consumers in some states, those who previously had to pay fees to freeze their credit, will no longer have to do so. A credit freeze, also known as a security freeze, restricts access to a consumer’s credit file, making it harder for identity thieves to open new accounts in the consumer’s name. The new law also allows parents to freeze for free the credit of their children who are under 16, while guardians, conservators, and those with a valid power of attorney can get a free freeze for their principals. In addition, the new law extends the duration of a fraud alert on a consumer’s credit report from 90 days to one year. A fraud alert requires businesses that check a consumer’s credit to get the consumer’s approval before opening a new account.

Lenders are reminded that this added accessibility to credit freezes can impact consumer's ability to apply for credit. Lenders should consider reminding consumers to temporarily lift any credit freezes before applying for new credit.


Debt collection scheme halted by FTC

The Federal Trade Commission has announced that the operators of an illegal debt collection scheme have agreed to be permanently banned from the debt collection business in order to settle Commission charges that they falsely threatened to have people arrested if their debts were not paid. The defendants falsely claimed consumers would spend up to 120 days in jail or pay thousands of dollars in bail. Court orders impose a judgment of $22.5 million against Gregory MacKinnon, Vantage Point Services LLC, Joseph Ciffa and Bonified Payment Solutions, Inc. The orders impose a judgment of $4.4 million against Angela Burdorf and Payment Management Solutions Inc. The judgment against Ciffa and Bonified Payment Solutions will be suspended due to their inability to pay. The full judgment against Ciffa and Bonified Payment Solutions will become due immediately if they are found to have misrepresented their financial condition.


Bureau plans Atlanta office

The Bureau of Consumer Financial Protection has announced plans to relocate its Southeast regional office from Washington, D.C. to Atlanta, Georgia. It already has regional offices in New York, Chicago, and San Francisco that are used mostly by supervision staff but also house enforcement attorneys and other Bureau personnel. Since the Bureau’s inception, the southeast regional team has been based temporarily at the Bureau’s D.C. headquarters. The move is anticipated to take place in late 2019.


State Department adds to CAATSA Russia-related list

The Department of State has issued a Fact Sheet to announce that the president has issued a new Executive Order, “Authorizing the Implementation of Certain Sanctions Set Forth in the Countering Americas Adversaries Through Sanctions Act,” to further the implementation of certain sanctions in the Countering America’s Adversaries Through Sanctions Act of 2017 (CAATSA) with respect to the Russian Federation.

The Fact Sheet also said that the Secretary of State took two actions Thursday to implement his delegated authorities pursuant to section 231 of CAATSA and to further impose costs on the Russian Government for its malign activities. First, the Secretary added 33 additional persons—individuals and entities—to the CAATSA section 231 List of Specified Persons (LSP) for being a part of, or operating for or on behalf of, the defense or intelligence sectors of the Government of the Russian Federation. Those persons are identified in the Fact Sheet. This action increases the number of persons identified on the LSP to 72. Any person who knowingly engages in a significant transaction with any of these persons is subject to mandatory sanctions under CAATSA section 231.

Second, in consultation with the Secretary of the Treasury, the Secretary of State imposed sanctions on the Chinese entity Equipment Development Department (EDD) and its director, Li Shangfu, for engaging in significant transactions with persons on the LSP. These transactions involved Russia’s transfer to China of Su-35 combat aircraft and S-400 surface-to-air missile system-related equipment.

Identifying information on EDD and Li Shangfu and links to additional resources connected to this State Department action can be found in our OFAC Update.


Eight public housing authorities receive $8M

HUD has announced awards of $8 million in grant funding to eight public housing authorities to keep residents safe and secure. The funding was offered through HUD’s Capital Fund Emergency Safety and Security Program and Capital Fund Emergency and Disaster Program.


HUD and Puerto Rico announce $1.5B hurricane relief agreement

HUD Secretary Ben Carson and Puerto Rico's Governor Ricardo Rosselló have announced the formal execution of a $1.5 billion grant agreement to help citizens in Puerto Rico recover from Hurricanes Irma and Maria. The signing of the agreement paves the way to speed recovery dollars needed to restore damaged and destroyed homes, businesses and infrastructure.


2020 W-4 form to be redesigned

The Treasury Department has announced that the IRS will implement a redesigned W-4 form for tax year 2020, a timeline that will allow for continued work to refine the new approach for the form. As a result of the enactment of the 2017 Tax Cuts and Jobs Act, Treasury and the IRS are revising the wage withholding system and Form W-4, Employee’s Withholding Allowance Certificate. In June, the IRS released a draft redesigned form for public comment and received many helpful suggestions for improvements, which they are working to integrate.


OCC September enforcement actions and terminations

The OCC has released information on recent enforcement actions against national banks, federal savings associations, and individuals currently and formerly affiliated with national banks and federal savings associations. An Order of Prohibition and for a Civil Money Penalty of $1,000 was issued against a former General Lender and Vice President of the Minnesota National Bank, Sauk Centre, Minnesota. Two terminations of existing enforcement actions were also included in the agency's announcement.


Community Banking in the 21st Century Conference

The FDIC is joining the FRB and the Conference of State Bank Supervisors (CSBS) in sponsoring the sixth annual Community Banking in the 21st Century research and policy conference . The conference, which brings together community bankers, academics, policymakers and bank supervisors from around the country, will meet October 3–4 at the Federal Reserve Bank of St. Louis.


NCUA Board approves appraisals amendment

The NCUA has announced that its Board yesterday unanimously approved two items on its agenda:

  • A proposed rule amending the agency’s regulation requiring real estate appraisals for certain transactions to provide a measure of regulatory relief
  • A request from the Texas Credit Union Department to revise its member business lending rule to provide parity with the NCUA’s rule following changes made in June 2018


More ISIS financial facilitators designated

OFAC has announced the designation of two Islamic State of Iraq and Syria (ISIS) financiers in accordance with Executive Order 13224, which targets terrorists and those providing support to terrorists or acts of terrorism. Both individuals are citizens of Trinidad and Tobago. For identification information, see our OFAC Update.


SEC shuts down $345M Ponzi scheme

The Securities and Exchange Commission reports that a federal court order has been issued halting an ongoing Ponzi-like scheme that raised more than $345 million from over 230 investors across the U.S. The SEC also obtained an emergency asset freeze and the appointment of a receiver. The Commission's complaint alleged that Kevin B. Merrill, Jay B. Ledford and Cameron Jezierski attracted investors to their scheme by promising significant profits from the purchase and resale of consumer debt portfolios. But in fact, the defendants were allegedly using a web of lies, fabricated documents, and forged signatures in an elaborate scheme to entice investors and perpetuate the fraud. Rather than direct investor funds to the acquisition and servicing of debt portfolios as promised, the defendants allegedly used the funds to make Ponzi-like payments to earlier investors. The SEC also alleges that Merrill and Ledford stole at least $85 million of the investor funds to maintain lavish lifestyles, spending millions of dollars on luxury items.


Bureau report on geography of credit invisibility

The CFPB has released a new research report on the geographic patterns of credit invisibility. Consumers who are “credit invisible” have no credit histories. This is the third in a series of Bureau studies on consumers with limited credit histories.


Bureau offers support for organizations serving economically vulnerable

The CFPB has announced it is looking for about 40 organizations that are interested in using the Bureau's toolkit, "Your Money, Your Goals," and related materials to help build the financial well-being of the people they serve. Members of the Your Money, Your Goals 2019 cohort will receive training, materials, and technical assistance, including support to develop and execute their "Your Money, Your Goals" implementation plans.


OCC proposes to amend recovery planning guidelines

The OCC has published [83 FR 47313] a notice of proposed rulemaking in today's Federal Register that would amend its enforceable guidelines relating to recovery planning standards for insured national banks, insured federal savings associations, and insured federal branches (Guidelines) to increase the average total consolidated assets threshold for applying the Guidelines from $50 billion to $250 billion. The proposed changes would also decrease from 18 months to 12 months the time within which a bank should comply with the Guidelines after the bank becomes subject to them. Finally, the proposal would make technical amendments to remove outdated compliance dates. Comments on the proposal are due by November 5, 2018.


July TIC data

Treasury has released Treasury International Capital (TIC) data for July 2018. The sum total in July of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a net TIC inflow of $52.2 billion. Of this, net foreign private inflows were $71.6 billion, and net foreign official outflows were $19.4 billion. Foreign residents increased their holdings of long-term U.S. securities in July; net purchases were $40.6 billion. Net purchases by private foreign investors were $54.4 billion, while net sales by foreign official institutions were $13.8 billion. U.S. residents decreased their holdings of long-term foreign securities, with net sales of $34.2 billion.


U.S.-UK working group meeting

U.S. and UK participants held the inaugural meeting of the U.S.-UK Financial Regulatory Working Group on September 12 in London. The Working Group was formed to deepen bilateral regulatory cooperation with a view to the further promotion of financial stability; investor protection; fair, orderly, and efficient markets; and capital formation in both jurisdictions.

Participants discussed the outlook for financial regulatory reforms and future priorities, including possible areas for deeper regulatory cooperation to facilitate further financial services activity between U.S. and UK markets. They also discussed the implications of the UK’s exit from the EU on financial stability and cross-border financial regulation, including a particular concern about contract continuity including servicing existing financial contracts after exit, noting the importance of reducing potential cliff-edge risks for business and consumers. Participants also discussed the U.S.-UK financial regulatory issues resulting from the UK’s exit from the EU, and recognized the importance of maintaining bilateral activity of U.S. and UK financial services firms.


Proposed high volatility commercial real estate rule

A joint press release from the Fed, FDIC, and OCC invites public comment on a proposal to modify the agencies' capital rules for high volatility commercial real estate exposures, as required by the Economic Growth, Regulatory Relief, and Consumer Protection Act. The proposal also asks for comment on certain terms contained in the revised definition of high volatility commercial real estate. The changes, when finalized, would apply to all banking organizations subject to the agencies' capital rules. Comments on the proposal will be accepted for 60 days following Federal Register publication.

The FDIC also issued FIL-50-2018 concerning the proposal.


FTC shuts down fake doc ID theft operation

The operators of websites that sold fake pay stubs and other documents used to facilitate identity theft and other frauds have agreed to permanently shut down their businesses as part of separate settlements with the Federal Trade Commission. In separate cases filed by the FTC, the Commission alleged that Katrina Moore, Steven Simmons, and George Jiri Strnad II and their affiliated companies operated websites that sold customers a variety of fake financial and other documents – such as pay stubs, income tax forms, and medical statements – which can be used to facilitate identity theft, tax fraud, and other crimes.


NACHA approves expanding Same Day ACH

NACHA announced yesterday that its membership has approved three new rules to expand the capabilities of Same Day ACH for all financial institutions and their customers. The first expands access to Same Day ACH by allowing Same Day ACH transactions to be submitted to the ACH Network for an additional two hours every business day (until 4:45 p.m. ET), starting September 18, 2020. The second increases the Same Day ACH per-transaction dollar limit to $100,000, effective March 20, 2020. The third increases the speed of funds availability for certain Same Day ACH and next-day ACH credits, effective September 20, 2019.


Treasury adds to TFI team

Treasury has announced two additions to the senior leadership team in its Office of Terrorism and Financial Intelligence (TFI). Isabel “Izzy” Patelunas was sworn in Monday as Assistant Secretary for TFI’s Office of Intelligence and Analysis (OIA). Andrea Gacki was named permanent Director of the Office of Foreign Assets Control (OFAC), after serving as Acting Director since May of this year.


FTC mails $10M+ to debit card customers

The Federal Trade Commission reported yesterday it is mailing more than 430,000 checks totaling more than $10 million to individuals who could not access money deposited to their NetSpend reloadable prepaid debit cards. According to an FTC complaint, many NetSpend customers were unable to access their funds, either because NetSpend denied or delayed activation of their card or because NetSpend blocked them from using it.


Bureau offers tool to track spending

The CFPB has posted an article announcing the availability of a spending tracker that can help individuals make decisions that can help them meet their goals and give them clarity around their spending habits.


Communities to be suspended from flood insurance program

The Federal Emergency Management Agency has published [83 FR 47077] in today's Federal Register a final rule identifying communities in Oregon, South Carolina and Wisconsin where the sale of flood insurance has been authorized under the National Flood Insurance Program (NFIP) that are scheduled for suspension on September 28, 2018, for noncompliance with the floodplain management requirements of the program:

  • OR: Bay City, Garibaldi, Manzanita, Nahalem, Rockaway Beach, Tillamook, Wheeler, and unincorporated areas of Tillamook County
  • SC: Camden, Sumter, and unincorporated areas of Kershaw, Lancaster, and Sumter counties
  • WI: Rothchild, Wausau, and Weston, and unincorporated areas of Marathon County


Thai-based aviation company targeted by OFAC

Treasury announced on Friday, September 14, that its Office of Foreign Assets Control (OFAC) designated Thailand-based My Aviation Company Limited for acting for or on behalf of Mahan Air, an Iranian airline previously designated for supporting Iran’s terrorism activities. The action was taken pursuant to Executive Order 13224, which targets terrorists and those providing support to terrorists or acts of terrorism. Our OFAC Update includes identification information on the company.


NCUA Board meeting notice

The NCUA Board has published [83 FR 46973] a notice of its next open meeting, at 10:00 a.m., Thursday, September 20, 2018. Matters for consideration include the Share Insurance Fund quarterly report, a board briefing on appointment of administrative law judges, NCUA rules on real estate appraisals, and the Texas Member Business Loan rule. A closed meeting will follow.


Bureau blogs on key financial skills

The CFPB has posted an article, "Facing a money decision? Check whether you use the 3 skills that stand out in people with high financial well-being," focusing on how consumers can find and use information to inform their financial decisions. The three skills needed are knowing when to look for information to fill a gap in one's knowledge; knowing where to find information that can be trusted; and knowing how to act on one's decision, to stay on track.

The Bureau also released a report, Pathways to financial well-being: The role of financial capability; a 10-question financial skills scale; and additional resources for financial educators.


Discrimination charge lodged against New Orleans landlord

HUD has announced that it is charging a New Orleans landlord with housing discrimination for publishing an advertisement that discriminated against families with children. The ad, which was brought to HUD’s attention by the Greater New Orleans Fair Housing Action Center, included language that stated, “No Teenagers Please.”


New OFAC Ukraine/Russia related FAQs

OFAC has announced it has posted two new Frequently Asked Questions (FAQs) to provide guidance on ”maintenance” as that term is used in General Licenses 14 , 15, and 16.


Industrial production and utilization continue to rise

The Federal Reserve has posted the September 14, 2018, G.17 Industrial Production and Capacity Utilization Report. Industrial production rose 0.4 percent in August for its third consecutive monthly increase. Manufacturing output moved up 0.2 percent on the strength of a 4.0 percent rise for motor vehicles and parts; motor vehicle assemblies jumped to an annual rate of 11.5 million units, the strongest reading since April. Excluding the gain in motor vehicles and parts, factory output was unchanged. The output of utilities advanced 1.2 percent, and mining production increased 0.7 percent; the index for mining last decreased in January. At 108.2 percent of its 2012 average, total industrial production was 4.9 percent higher in August than it was a year earlier. Capacity utilization for the industrial sector moved up in August to 78.1 percent, a rate that is 1.7 percentage points below its long-run (1972–2017) average.


Regulators' statement on institutions affected by Florence

A joint press release was issued on Friday by the OCC, FRB, FDIC, NCUA, and the Conference of State Bank Supervisors which stated they recognize the serious impact of Hurricane Florence on the customers, members, and operations of many financial institutions and will provide appropriate regulatory assistance to affected institutions subject to their supervision. The agencies encourage institutions operating in the affected areas to meet the financial services needs of their communities. The FDIC also issued FIL-48-2018 on the topic.


Summary of Deposits released

The FDIC has released the results of its annual survey of branch office deposits for all FDIC-insured institutions. The FDIC's Summary of Deposits (SOD) provides deposit totals for each of the more than 88,000 domestic offices operated by more than 5,500 FDIC-insured commercial and savings banks, savings associations, and U.S. branches of foreign banks. The SOD includes historical data going back to 1994 that can be analyzed using online reports, tables, and downloads.


Quarterly CU data available

The NCUA has issued Second Quarter 2018 State Credit Union data, which indicate that federally insured credit unions generally saw continued positive trends in the second quarter of 2018. Nationally, overall membership continued to grow, concentrated in larger credit unions. Eighty-five percent of federally insured credit unions reported positive net income during the first half of 2018. Median loan growth was 5.4 percent and median asset growth was 2.1 percent during the year ending in the second quarter.


Citigroup pays $12.9M for misleading users of dark pool

The SEC has entered an order finding that Citigroup Global Markets Inc. misled users of a dark pool operated by one of its affiliates. The order found that Citigroup misled users with assurances that high-frequency traders were not allowed to trade in Citi Match, a premium-priced dark pool— a trading venue or marketplace that accepts, matches and executes orders to buy and sell securities without providing its best-priced orders for inclusion in the consolidated quotation data—operated by Citi Order Routing and Execution (CORE), when two of Citi Match’s most active users reasonably qualified as high-frequency traders and executed more than $9 billion of orders through the pool. It also found that Citigroup failed to disclose that over a period of more than two years, close to half of Citi Match orders were routed to and executed in other trading venues, including other dark pools and exchanges, that did not offer the same premium features as Citi Match. The order directs that Citigroup's subsidiaries pay in excess of $12.9 million in disgorgement, interest, and civil money penalties.


OFAC targets North Korea-controlled infotech companies

The Treasury Department has announced that OFAC made North Korea-related designations against two entities and one individual, targeting the revenue that North Korea earns from overseas information technology workers. OFAC designated Jilin, China-based Yanbian Silverstar Network Technology Co., Ltd., its North Korean CEO, Jong Song Hwa, and its Vladivostok, Russia-based sister company, Volasys Silver Star. For identification information, see our OFAC Update.


Treasury and IRS propose GILTI regs

Treasury and the IRS yesterday issued their first set of guidance on global intangible low-taxed income (GILTI). The 2017 Tax Cuts and Jobs Act requires U.S. shareholders to include GILTI generated by controlled foreign corporations (CFCs) in their gross income. Under the new law, a U.S. taxpayer owning at least 10 percent of the value or voting rights in one or more CFCs is required to include its global intangible low-taxed income as currently taxable income, regardless of whether any amount is distributed to shareholders. The rule affects U.S. individuals, domestic corporations, partnerships, trusts and estates.


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