|
The Morning Risk Report: Interactive Brokers to Pay $38 Million Over Anti-Money-Laundering Claims
|
|
|
|
|
|
|
Interactive Brokers failed to file more than 150 suspicious activity reports flagging potential manipulation of microcap securities, according to the Securities and Exchange Commission. PHOTO: ANDREW HARNIK/ASSOCIATED PRESS
|
|
|
Good morning. A U.S. broker-dealer agreed to pay a total of $38 million to settle claims by U.S. regulators that it failed for more than five years to maintain an adequate anti-money-laundering program. Interactive Brokers LLC hadn’t monitored hundreds of millions of dollars of customers’ wire transfers for money laundering concerns and failed to report potential manipulation of microcap securities in customer accounts, regulators said.
The total fine stemmed from coordinated settlements with the U.S. Securities and Exchange Commission, the U.S. Commodity Futures Trading Commission and the Financial Industry Regulatory Authority, a Wall Street self-regulatory group.
[Continued below…]
|
|
|
Finra’s action focused on a period from January 2013 through September 2018 during which Interactive Brokers grew to become one of the largest electronic broker-dealers in the U.S. based on shares traded, with more transactions cleared for foreign financial institutions than any other dealer, according to the regulator.
Interactive Brokers failed to strengthen its anti-money-laundering program in tandem with that growth, Finra said. Even after a compliance manager warned his supervisor that “we are chronically understaffed” and “struggling to review reports in a timely manner,” it took years for the broker-dealer to materially increase staffing or enhance its safeguards, Finra said.
Interactive Brokers consented to the settlements without admitting to or denying the regulators’ findings. A spokesperson for the broker-dealer said it had cooperated fully with the regulators and that steps it had taken to enhance its anti-money-laundering safeguards were taken into account in the settlements.
|
|
|
|
|
Marco Rubio is among those Beijing said it would sanction in retaliation for similar moves by the Trump administration. PHOTO: CHIP SOMODEVILLA/GETTY IMAGES
|
|
|
China said it would impose sanctions on 11 U.S. citizens, including Republican Sens. Ted Cruz and Marco Rubio, in retaliation for similar measures by Washington against Hong Kong and mainland Chinese officials.
The measure is the latest volley in a diplomatic spat between the U.S. and China that has involved closing consulates in Houston and the southwestern Chinese city of Chengdu and a previous round of reciprocal sanctions. President Trump has also been turning up the pressure on China on several fronts, holding military exercises in the South China Sea and signing a pair of executive orders that would restrict transactions involving two China-based smartphone apps, TikTok and WeChat.
Meanwhile, China’s campaign to quash dissent in Hong Kong accelerated with the arrest of pro-democracy media baron Jimmy Lai, sending an ominous signal about the future of a free press and the new limits on those challenging Beijing’s tightening grip on the former British colony.
|
|
|
-
A California judge said ride-hailing companies Uber Technologies and Lyft shouldn’t classify their drivers as independent contractors, citing the state’s gig-worker law that went into effect this year. California sued the companies, saying the decision to classify drivers as contractors had deprived them of rights such as paid sick leave and unemployment insurance. The companies plan to appeal.
-
Families of nine victims of the Sandy Hook school shooting are challenging weapons maker Remington Outdoor’s proposal to quickly sell its assets in bankruptcy, asking how the company landed back in chapter 11 at a time when Americans are buying guns at record levels.
-
The Trump administration has stepped up interventions in complaints by patients and health workers who say they’ve been victims of discrimination under policies that hospitals and other health organizations have adopted to combat the new coronavirus. As the Department of Health and Human Services’ Office for Civil Rights has intervened in the complaints, it has been negotiating settlements and issuing guidance to remind health organizations, states and local governments about their responsibilities under federal law.
-
Hertz Global Holdings raised $29 million selling its likely worthless stock before regulators dissuaded the bankrupt rental-car company from selling more.
-
Kodak Shares Fall as Planned $765 Million Loan Is Put on Ice
|
|
|
|
McDonald’s dismissed CEO Steve Easterbrook without cause in November 2019. PHOTO: STACEY WESCOTT/TNS/ZUMA PRESS
|
|
|
McDonald’s said it is suing former Chief Executive Steve Easterbrook and seeking to recoup tens of millions of dollars it paid him in severance and benefits, alleging that he lied to the board about sexual relationships with employees before his ouster last fall.
The fast-food giant dismissed Mr. Easterbrook without cause in November 2019, following an investigation into his conduct. McDonald’s reopened the matter after it received an anonymous tip about a relationship between Mr. Easterbrook and an employee, according to the complaint filed Monday. An investigation found that Mr. Easterbrook allegedly engaged in three other relationships with employees that were sexual in nature, including the one that triggered the inquiry.
Board efforts to recover compensation from CEOs for activities and statements pertaining to their termination are unusual, said Steven Hall, managing director of pay consultancy Steven Hall & Partners. Patrick McGurn, special counsel to proxy-advisory firm Institutional Shareholder Services, said such “clawbacks” are rarely so sweeping or so public.
|
|
|
-
Most companies don’t have a chief medical officer, but more are exploring their options as they seek health expertise. Traditionally, companies with CMOs tended to be health-care or pharmaceutical companies or big hospital systems, where medical chiefs manage teams of doctors and researchers and help with product development. But the coronavirus pandemic is broadening the scope of sectors in need of medical leaders and expanding the duties of CMOs at companies that had one before this year, executives say.
|
|
|
|
The aftermath of the explosion at the seaport of Beirut. The blast killed more than 150 people and injured thousands of others. PHOTO: BILAL HUSSEIN/ASSOCIATED PRESS
|
|
|
Lebanese Prime Minister Hassan Diab and his cabinet resigned under pressure from protests that have sought to overturn the country’s political leadership following last week’s deadly explosion that devastated large parts of central Beirut.
Rather than resolving the political and economic crisis in Lebanon, the cabinet’s resignation is likely to trigger more political instability in one of the Middle East’s most important centers of culture and finance and an enclave of relative stability next to war-torn Syria.
“Not only do we have an absence of government and a political vacuum, but we’re going to have a severe problem with the function of the state of Lebanon,” said Imad Salamey, a political scientist at Lebanese American University in Beirut. “We are heading toward the unknown.”
|
|
|
-
The U.S. reported its lowest number of new coronavirus cases in about a week, as new infections in some parts of the country trended down, while confirmed cases world-wide neared 20 million.
-
The federal budget deficit shrank last month from a year earlier as households and businesses made tax payments that had been delayed from April, the Congressional Budget Office estimated.
|
|
|
|
Trevor Milton from Nikola presented the company’s new full-electric and hydrogen fuel-cell battery trucks at an event in Turin, Italy, last year. PHOTO: MASSIMO PINCA/REUTERS
|
|
|
-
Nikola Corp. said it secured an order for 2,500 electric garbage trucks from refuse giant Republic Services Inc., with the announcement coming less than a week after analysts complained about a lack of clarity on the business plan and order bank. Nikola’s founder, Trevor Milton, said the deal fulfills one of three major milestones recently promised by the end of 2020.
-
Carvana Co., an online-only seller of used vehicles, is generating new interest from car buyers and Wall Street as its business benefits from the burst in internet shopping. Carvana’s recent success comes at a critical moment for the eight-year-old company, which was founded with the mission of changing the way people buy cars but has yet to turn a profit and is fending off tougher competition in the online-retailing space.
|
|
|
|
|
|