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TFS- ICAP were fined “£3.44m” by the FCA this week (storey below) for misconduct. Interestingly, not only were there “shortcomings in its oversight” and compliance arrangements, it also seems TFS-ICAP were trying to obfuscate the practice. The FCA investigation had to “establish the existence of a practice that was opaque and unrecorded in any of TFS-ICAP’s records”… Mark Steward, ED of Enforcement and Market Oversight, gave a warning to the market saying:
“The market should also take notice that the opacity of such practices, while forensically challenging, is no bar to action either.”
Also this week JPMC were fined $250M for ‘inadequate internal controls…’ (story below). JPMC say “…we have invested significantly in and enhanced our controls platform over the last several years to address the issues identified”. This is the second time in two months that the bank agreed to pay settlements to U.S. regulators. In late September, they agreed to pay $920M to three federal agencies over its role in the manipulation of global markets for metals and U.S. Treasurys. Let’s not forget however that last month JP Morgan’s net income rose to $9.44bn from $9.1bn a year earlier.
And lastly… [this is gold!] leaked emails to Cityam show that TfL suggest an Internal Audit report should become a SWOT to water down findings. You couldn’t make it up!
Worth a full read, but the highlight for me was the comment that by turning the internal audit report into a SWOT… “the areas of effective control will be strengths, and the issues will end up being opportunities for improvement”. For your convenience and amusement here’s the screen shot of the email https://www.cityam.com/wp-content/uploads/2020/11/Screenshot-2020-11-24-at-19.35.33-1.png
Full story: https://www.cityam.com/exclusive-tfl-officials-watered-down-croydon-tram-safety-audit-to-placate-first-group/
I hope you enjoy this week’s offering.
In the news this week…
FINED £3.44M FOR MARKET MISCONDUCT
FCA fined the FX Options Broker, £3.44m providing misleading information to clients by ‘printing’ trades… read more (https://www.fca.org.uk/news/press-releases/fca-fines-tfs-icap-market-misconduct)
JPMC PAY $250 MILLION FOR ‘CONTROL’ FAILINGS
The OCC said JPMorgan operated a weak management and control framework for its fiduciary activities within the AM&W businesses and had an insufficient audit program and inadequate internal controls… read more (https://uk.reuters.com/article/idUKKBN2842LM)
SYNTHETIC IDENTITY FRAUD WORRYING U.S. REGULATORS
Synthetic identity fraud becomes an increasing concern for regulators, as banks struggle to find common ways of tackling the innovative theft technique that combines real and fictitious data… read more (https://legal.thomsonreuters.com/blog/synthetic-identity-fraud-worrying-u-s-regulators/)
CSIS ALLEGES IRAN USED TORONTO COMPANY TO WIRE MILLIONS TO CANADA DESPITE SANCTIONS
A Toronto currency exchange business secretly helped Iran wire millions of dollars into Canada in violation of sanctions… read more (https://globalnews.ca/news/7468366/csis-iran-toronto-company-millions-canada-sanctions/)
GT AUDIT HIT WITH LAWSUIT OVER PATISSERIE VALERIE COLLAPSE
Administrators launch claim for damages against Grant Thornton in respect of negligent audits of ‘financial statements for the financial periods 30 Sept 2014 – Sept 2017… read more (https://www.fnlondon.com/articles/grant-thornton-hit-with-lawsuit-over-collapse-of-patisserie-valerie-20201120)
CALL FOR THREE-YEAR BAN ON EY BIDDING ON PUBLIC CONTRACTS
Anti-corruption group claims ‘recurring professional misconduct’ should preclude the auditor from future business… read more (https://financial24.co.uk/call-for-three-year-ban-on-ey-bidding-on-public-contracts/)
AUSSIE BANKS AND WEALTH FIRMS TOLD TO BOLSTER INTERNAL AUDIT AND RISK CULTURE
The Australian IIA’s new practice guide calls for the scope of internal auditor teams to be “unrestricted and organisationwide”, staffed by senior people able to challenge management. It flags a continuous auditing function that examines behavioural traits… read more (https://www.afr.com/companies/financial-services/banks-wealth-firms-told-to-bolster-internal-policing-of-risk-culture-20201125-p56hqv)
CYBER RISK: “THE INTERNAL AUDIT FUNCTION SHOULD BE THE EYES AND EARS OF THE BOARD INTO THEIR ORGANISATIONS“
The Australian Prudential Authority (APRA), said many audit committees within the industry failed to act and struggled to interpret the severity of cyber risk findings compared to other areas of the business… read more (https://www.bankingday.com/bank-cyber-calamity-too-close-for-comfort)
** Hiring for your Internal Audit team?
We have an extensive network of immediately available Internal Audit candidates. Call Paul on 0203 397 1774
Before establishing Fleet Search and Selection with Craig Phipps, Paul worked as an Equity Research Analyst in London. Now, a recruitment consultant for almost two decades, he has recruited many senior roles, including Global Heads of Audit and C-Suite executives. His wide network spans Insurance, Asset Management and Banking, with expertise including Audit, Compliance and Advisory.
As with his day job, Paul likes getting people excited about things. He is a passionate competitive foil fencer with 5 caps for Scotland and now enjoys coaching others to enjoy fencing too.
[email protected] (mailto:[email protected])
Craig has spent over 20 years recruiting for the Financial Services Industry, predominately in Business and Technology Audit for Investment Banks and Asset Managers. He has also recruited extensively in Market Risk and Quantitative finance. Prior to establishing Fleet Search and Selection, he headed up the Investment Banking Audit and IT Audit Divisions at two prominent recruitment companies.
Craig has helped 100’s of candidates make difficult career choices. When not at work, his strategic mindset turns to his passions for skiing and rugby and is a huge supporter of Australia’s national rugby team.
[email protected] (mailto:[email protected])
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