failing to conduct an adequate risk assessment of the risks of their online business being used for money laundering and terrorist financing
allowing online customers to deposit large amounts without carrying out sufficient SOF checks – one consumer was allowed to deposit £742,000 in 14 months without appropriate SOF checks and another, who was known to live in social housing, was allowed to deposit £186,000 in six months without sufficient SOF checks
failing to conduct enhanced customer due diligence checks soon enough – one online customer was allowed to deposit £524,501 between December 2019 and October 2020 before the operator closed the account due to the customer failing to supply SOF evidence
placing excessive reliance on open-source information – one online consumer was allowed to deposit £140,700 between December 2019 and October 2020 but prior to a SOF check in August 2020, the operator based its knowledge of the customer’s source of wealth on open-source searches
allowing customers to stake large amounts of money without having been monitored or scrutinised – one betting shop customer was allowed to stake a total of £168,000 on shop terminals over eight months before the operator carried out due diligence checks.
Federal Reserve Board announces it has fined EagleBank $9.5 million for violation of the Board’s insider lending regulation and has permanently barred its former CEO and chairman from the banking industry
Federal Reserve Board
The Federal Reserve Board on Tuesday announced that it has fined EagleBank, of Bethesda, Maryland, $9.5 million for violation of the Board's insider lending regulation. The bank improperly extended credit to entities owned or controlled by its then-CEO and Chairman, Ronald D. Paul.
The Board found that EagleBank had deficient internal controls over insider lending practices between 2015 and 2018, which allowed the bank to extend credit totaling nearly $100 million to entities that Paul owned or controlled, including certain family trusts, without making appropriate disclosures to, or obtaining required approvals from, a majority of the bank's board of directors. These internal control deficiencies also extended to the bank's supervision of lending staff, who permitted Paul to participate in matters in which he had a conflict of interest. The Board also cited EagleBank for third-party risk management deficiencies over the same period that resulted in inadequate oversight of contracts between the bank and a local government official.
FCMC issues the first EU-wide authorisation to provide crowdfunding services in Latvia to SIA CrowdedHero Latvia
On 16 August, the Board of the Financial and Capital Market Commission (FCMC) adopted a decision to issue the first authorisation to provide crowdfunding services in Latvia to SIA CrowdedHero Latvia in accordance with Regulation (EU) 2020/1503. The FCMC is one of the first supervisory authorities to issue such authorisation to provide crowdfunding services.The commercial activities of SIA CrowdedHero Latvia aim to provide crowdfunding services to invest in equity-based projects. The plans to attract investment concern start-ups and mature companies, as well as small and medium-sized enterprises with an existing cash flow matching the business model established by SIA CrowdedHero Latvia.
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