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How to add predictive analytics into your risk program. Risk reports are often limited to historical insights and issues and do not provide guidance and insights into the future of the organization. Adding predictive analytics can allow your organization to detect emerging risks and create mitigation plans. This can be achieved by combining internal and external key risk indicators (KRIs) and key performance indicators (KPIs) with regulatory intelligence. This ensures that risk reports can detect more issues and highlight areas of concern. Click here to learn more.

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OCC releases enforocement actions

The OCC has released new enforcement actions taken against national banks, federal savings associations, and individuals currently and formerly affiliated with national banks and federal savings associations.

  • A former Managing Director and Chief Administrative Officer of Oversight and Controls at JPMorgan Chase Bank, N.A., was ordered to pay a $35,000 civil money penalty for retaining non-public OCC information on her departure from that bank and illegally sharing that information with employees at her subsequent employment with another bank.
  • A former Executive Director of the Global Regulatory Relations Group of MS Services Group, Inc., and Morgan Stanley & Co. LLC, and an institution-affiliated part of Morgan Stanley Private Bank, N.A. and Morgan Stanley Bank, N.A., was ordered to pay a $7,500 civil money penalty for retaining, on her departure from Morgan Stanley in 2017, confidential Morgan Stanley documents, at least 18 of which contained non-public OCC information regarding one or both of the banks, and after being employed by another financial institution, using the documents containing non-public OCC information, leaving them unsecured in her office, thereby disclosing them.
  • A former teller at Wells Fargo Bank, N.A. was issued a consent prohibition order based on the Comptroller's finding, which was neither admitted nor denied, that she processed nine unauthorized over-the-counter cash withdrawals totaling $22,000 from the checking account of a bank customer and disbursed the cash to an individual she knew was not an authorized user of the account, receiving $500 herself for her actions.


SEC targets Ponzi scheme

The Securities and Exchange Commission has announced it has obtained a temporary restraining order (TRO) and asset freeze against two individuals and two companies they control in connection with an alleged $6 million Ponzi scheme that defrauded at least 55 investors, many of whom are senior citizens or small business owners. According to the complaint filed by the SEC, Neil Burkholz of Boca Raton, Florida, and Frank Bianco, of Pembroke Pines, Florida, through their companies Palm Financial Management LLC and Shore Management Systems LLC, solicited investors by falsely representing that their proprietary options trading strategies were highly profitable. In reality, as alleged in the complaint, the defendants invested less than half of investor funds and those investments resulted in near-total losses.


Florida man charged with $50M+ in financial fraud

The Department of Justice has unsealed an indictment charging David John Ridling of Vero Beach, Florida, with ten counts of wire fraud, four counts of bank fraud, nine counts of money laundering, and two counts of aggravated identity theft. If convicted, Ridling faces a maximum penalty of 20 years in federal prison for each wire fraud count, 30 years in federal prison for each bank fraud count, 10 years in federal prison for each money laundering count, and a mandatory penalty of 2 years’ imprisonment for the aggravated identity theft counts.


Fed Board issues consent prohibition order

The Federal Reserve Board has issued an Order of Prohibition Upon Consent against Thang Nguyen, a former banking associate at the Richardson, Texas, branch of East West Bank, Pasadena, California. The Board found that Nguyen misappropriated $101,000 from a bank customer's account for his personal benefit. The Order noted that Nguyen had separately agreed to pay full restitution to the bank for its losses resulting from Nguyen's conduct.


State updates Cuba Restricted List

The Department of State has published an update [84 FR 63953] to its List of Restricted Entities and Subentities Associated with Cuba (the Cuba Restricted List) with which direct financial transactions are generally prohibited under the Cuban Assets Control Regulations (CACR). The updated list is effective November 19, 2019.


OFAC designates ISIS support networks

On Monday, OFAC designated two Turkey-based Islamic State of Iraq and Syria (ISIS) procurement agents and four ISIS-linked companies operating in Syria, Turkey, and across the Persian Gulf and Europe for providing critical financial and logistical support to ISIS. Additionally, Treasury is acting against an Afghanistan-based organization, Nejaat Social Welfare Organization, for using false charitable pretenses as a cover to facilitate the transfer of funds and support the activities of the terrorist group’s branch in Afghanistan, ISIS – Khorasan (ISIS-K). Treasury also took action against two senior officials affiliated with this organization.

These targets have been designated pursuant to Executive Order 13224, which targets terrorists and those who have materially assisted, sponsored, or supported terrorists. Identity information for the five entities and four individuals designated on Monday can be found in BankersOnline's OFAC Update.


FFIEC IT exam handbook revised

The Federal Financial Institutions Examination Council (FFIEC) has revised the "Business Continuity Management" booklet, one of a series of booklets that make up the FFIEC Information Technology Examination Handbook (IT Handbook). The revised "Business Continuity Management" booklet provides information for examiners to assess the adequacy of a bank’s risk management related to the availability of critical financial products and services. The revised booklet replaces the "Business Continuity Planning" booklet issued in February 2015 and rescinds OCC Bulletin 2015-9, "FFIEC Information Technology Examination Handbook: Strengthening the Resilience of Outsourced Technology Services, New Appendix for Business Continuity Planning Booklet."


FFIEC advisory on FATF-identified jurisdictions with AML/CFT deficiencies

FinCEN has issued Advisory FIN-2019-A007 on "Financial Action Task Force-Identified Jurisdictions with AML/CFT Deficiencies and Relevant Actions by the United States Government."

FinCEN has outlined in the Advisory the countermeasures against the AML/CFT deficiencies of the Democratic Peoples Republic of Korea (North Korea) and Iran, and listed the FATF-identified jurisdictions with strategic AML/CFT deficiencies. If a SAR is filed on suspicious activity connected to any of the jurisdictions or activities highlighted in Advisory FIN-2019-A007, the key term "October 2019 FATF FIN-2019-A007" should be included.


FTC order stops student loan debt scheme

The Federal Trade Commission reports that a temporary restraining order obtained by the Commission halted an operation that bilked consumers out of millions of dollars by pretending to be affiliated with the U.S. Department of Education and falsely promising student loan debt relief. A complaint filed by the FTC against Arete Financial Group and several related companies alleged that the defendants used radio and television ads, as well as online ads and telemarketing calls in which they pretended to be affiliated with the Department of Education, to promise to enroll consumers in student loan forgiveness, consolidation, and repayment programs to reduce or eliminate their monthly payments and principal balances.


Tech company to implement data security program

InfoTrax Xystems, L.C., a Utah-based technology company, has agreed to implement a comprehensive data security program to settle Federal Trade Commission allegations that the company failed to put in place reasonable security safeguards. A complaint filed by the FTC alleged that the failure to put in place reasonable, low-cost, and readily available security protections to safeguard the personal information it maintained on behalf of its clients allowed a hacker to access the personal information of a million consumers.


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