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Top Story Compliance Related


School District charged by SEC

The SEC has charged a San Diego County school district, Sweetwater Union High School District, and its former Chief Financial Officer, Karen Michel, with misleading investors who purchased $28 million in municipal bonds.

According to the SEC's complaint against Michel and its order against Sweetwater, in April 2018, Sweetwater and Michel provided investors with misleading budget projections that indicated the district could cover its costs and would end the fiscal year with a general fund balance of approximately $19.5 million, when in reality the district was engaged in significant deficit spending and on track to a negative $7.2 million ending fund balance. The order finds that Michel managed the bond offering for the district and was aware of reports showing that the projections were untenable and contradicted by known actual expenses. Nevertheless, as stated in the order, Sweetwater and Michel included the projections in the April 2018 bonds' offering documents and also provided them to a credit rating agency that rated the district, while omitting that the projections were contradicted by internal reports and did not account for actual expenses. Additionally, the complaint alleges that Michel signed multiple certifications falsely attesting to the accuracy and completeness of the information included in the offering documents.


OFAC targets drug traffickers and al-Qa'ida network

The Treasury Department has announced that OFAC has identified Zulma Maria Musso Torres as a significant foreign narcotics trafficker pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act). Musso Torres (a.k.a. “La Patrona” or “La Señora”) is the leader of an international drug trafficking organization primarily based in Santa Marta, Magdalena, Colombia.

Musso Torres is assisted by her two sons, Washington Antunez Musso and Juan Carlos Reales Britto, and her husband, Luis Antonio Bermudez Mejia, who were also designated for providing material support to the narcotics trafficking activities of Musso Torres.

Also designated yesterday were two Colombian entities, Exclusive Import Export S.A.S. and Poligono Santa Marta S.A.S., that are owned, controlled, or directed by, or act for or on behalf of, Antunez Musso and Reales Britto.

Treasury also reported that OFAC yesterday imposed sanctions against five al-Qa’ida supporters operating in Turkey who provided a range of financial and travel facilitation services to al-Qa’ida.

For identification information on all of the individuals and entities OFAC designated yesterday, see the September 16, 2021, BankersOnline OFAC Update.


FTC opens rulemaking petition process

The Federal Trade Commission has announced it voted yesterday to make significant changes to enhance public participation the agency’s rulemaking, to increase public participation and accountability around the work of the FTC.

The Commission approved a series of changes to the FTC’s Rules of Practice designed to make it easier for members of the public to petition the agency for new rules or changes to existing rules that are administered by the Commission. The changes were described as a key part of the work of opening the FTC’s regulatory processes to public input and scrutiny. This is a departure from the previous practice, under which the Commission had no obligation to respond to or otherwise address petitions for agency action.

Among the changes are:

  • More clarity for those seeking to file petitions related to rulemaking with regard to information that is required with submissions, as well as guidance on the data that can be helpful to the Commission in evaluation petitions.
  • A new requirement that the Commission publish all petitions for rulemaking that it receives in the Federal Register and solicit public comment about those petitions.
  • A new requirement that the Commission provide petitioners with a specific point of contact in the agency, and that the Commission provide a response to petitioners on its decision to either act on or deny the petition.

In addition to formal rulemaking, the new changes will also apply to requests by certain parties for special exemption from FTC rules, as well as petitions related to industry guidance issued by the Commission.


App Annie and founder to pay $10M for deceptive practices

The Securities and Exchange Commission has announced that App Annie Inc., a leading alternative data provider for the mobile app industry, and its co-founder and former CEO and chairman Bertrand Schmitt have agreed to settle securities fraud charges for engaging in deceptive practices and making material misrepresentations about how App Annie's alternative data was derived. App Annie and Schmitt have agreed to pay more than $10 million to settle the matter, which is the SEC's first enforcement action charging an alternative data provider with securities fraud.

The SEC order finds that App Annie and Schmitt violated the anti-fraud provisions of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. Without admitting or denying the findings, App Annie and Schmitt consented to the entry of a cease-and-desist order under which App Annie is ordered to pay a penalty of $10 million, Schmitt is ordered to pay a penalty of $300,000, and Schmitt is prohibited from serving as an officer or director of a public company for three years.


Refund checks sent to victims of abusive debt collector

The Federal Trade Commission has announced that it is sending checks to 603 people who paid money they did not owe to a debt collector that used deceptive and abusive collection methods.

In 2018, the FTC and State of New York alleged that Campbell Capital, LLC and its owner Robert Heidenreich, along with a number of other related companies, collected payments on debts from consumers that exceeded the amounts they allegedly owed. The defendants in the case were able to collect these funds by allegedly using tactics such as threatening that consumers would be arrested or served with legal papers at work if they did not make payments immediately. In some cases, according to the suit filed by the FTC and New York, the collectors pretended to be sheriff’s office employees or process servers when making such threats in phone calls with consumers.


FDIC webinar on consumer complaint management

The FDIC has posted FIL-66-2021 announcing its offering of a 90-minute webinar for FDIC-supervised institutions on October 5, 2021, to provide information and answer questions relating to consumer complaints management. The presentation will include a review of the most recent complaint data and will provide information to help banks with complaint management. It will also provide information on how the FDIC facilitates the resolution of complaints and how this information is used in supervision. Online registration for the webinar is required.


Comptroller's Handbook booklet updated

The Office of the Comptroller of the Currency has issued a new "Problem Bank Supervision" booklet of the Comptroller's Handbook. The revised booklet:

  • replaces "An Examiner's Guide to Problem Bank Identification, Rehabilitation, and Resolution," dated January 2001.
  • incorporates OCC Bulletin 2018-33, "Prompt Corrective Action: Guidelines and Rescissions."
  • includes information regarding timely identification and rehabilitation of problem banks and advanced supervision, enforcement, and resolution when conditions warrant.
  • includes a comprehensive discussion of the OCC's authority under 12 CFR 6, "Prompt Corrective Action."
  • complements other booklets of the Comptroller's Handbook and topical OCC and interagency issuances.


OFAC posts SDN List updates

OFAC has issued an SDN List Update providing revised identification information for two entities subject to OFAC's Non-Proliferation [NPWMD] and Russian Harmful Foreign Activities [RUSSIA-EO14024] sanctions programs. For details on the updated information, see BankersOnline's September 13, 2021, OFAC Update.


HMDA Filing Instructions Guides

The FFIEC has posted the Filing Instructions Guide (FIG) for data collected in 2022 and the Supplemental Guide for Quarterly Filers for 2022.

Links to current and historical FIGs and Supplemental Guides for HMDA filing are listed at


OCC to hold public hearing on former Wells Fargo executives

A public hearing before an Administrative Law Judge will be held by the OCC beginning today, September 13, 2021, in Sioux Falls, South Dakota, to litigate enforcement actions, against Claudia Russ Anderson, former Community Bank Group Risk Officer, David Julian, former Chief Auditor, and Paul McLinko, former Executive Audit Director, of Wells Fargo Bank, N.A., Sioux Falls, South Dakota. This hearing represents the culmination of the OCC’s longstanding efforts to hold these individuals accountable for material failures in risk management and for consumer harm.

The OCC is seeking an order of prohibition that would bar Ms. Russ Anderson from further participation in the conduct of the affairs of any insured depository institution. The OCC is seeking personal cease and desist orders against Mr. Julian and Mr. McLinko that would require them to take certain affirmative actions or refrain from certain conduct in any future involvement in the banking industry.

As indicated in the notice of charges, the OCC is also seeking civil money penalties against each individual in amounts ”consistent with the law and evidence presented during the proceedings.”

Access to the hearing will be available online or by phone via Zoom. Further information is available HERE on the OCC's website.


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