✈️ This Week in GRC: Wings Clipped
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Welcome to Issue 67 of This Week in GRC, MBK Search's weekly digest of the news and views in the world of governance, risk, and compliance.
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🔔 This Week's Opening Bell
"Thanks to shoddy management and deliberate deceit at the world’s biggest aerospace company, 346 people are dead — killed in wholly avoidable crashes following squarely from obsessive cost-cutting that undermined the safety of Boeing aircraft," wrote The Financial Times in its withering take on aircraft giant's well-documented failings.
But being, effectively, a corporate felon doesn't assuage the harm Boeing has inflicted on countless numbers of people. There's nothing in this week's plea deal that its "lavishly paid executives" will face their day in court for the chaos that happened on their watch.
There is a lesson, albeit a painfully extracted one. As the FT points out, companies who compromise on product safety in reckless pursuit of shareholder return will get more than their wings clipped.
📰 This Week's Issue
📄 What does the Corner Post ruling mean for GRC?
🤝 Will a proposed OCC rule lead to more IA hiring?
📉 Why risk management visualizations can fall short
✍️ Insight & Analysis from MBK Search
First Chevron, now Corner Post: What's next for regulators?
The Supreme Court’s recent decision in Corner Post, Inc. v. Board of Governors of the Federal Reserve System upended long-held assumptions about the time limits for challenging agency regulations.
The July 1, 2024 ruling, which followed closely on the heels of the Court’s overturning of Chevron deference, has “significantly expanded [ed] opportunities for APA challenges."
Proposed OCC rules would be boon for Internal Audit hiring
The Office of the Comptroller of the Currency (OCC) plans to expand recovery planning requirements for big U.S. banks.
At MBK Search, we expect that this will spur hiring in key risk management and compliance functions. Here are the key takeaways.
CFPB proposes loss mitigation rule for mortgages
The Consumer Financial Protection Bureau (CFPB) has proposed amendments to Regulation X to make it easier for homeowners to get help when they struggle to pay their mortgages. The proposed changes would streamline loss mitigation procedures, improve borrower-servicer communication, and enhance language access for borrowers with limited English proficiency.
📰 This Week's GRC Headlines
Citigroup Fined $135.6m for risk failures, governance deficiencies
Citigroup has been fined $135.6 million by two banking regulators, the Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board, for failing to remediate risk management, data governance, and internal controls.
The OCC imposed a $75 million fine, while the Federal Reserve Board levied a $60.6 million penalty. Both cited Citi's failure to meet remediation milestones set out in their respective 2020 consent orders.
According to the regulators, Citi needed to implement and maintain adequate enterprise-wide risk management, compliance risk management, internal controls, and data governance programs commensurate with the bank's size, complexity, and risk profile.
Regulators identified specific areas of concern at Citi, including ineffective front-line units and independent risk management, an inadequate risk governance framework, and insufficient compensation and performance management programs to incentivize effective risk management.
Citi CEO Jane Fraser reaffirmed the bank's commitment to addressing the consent orders. She acknowledged the progress made and the areas where the bank needs to improve, particularly in data quality management. However, she expressed confidence in Citi's ability to meet its strategic and financial goals.
BitMEX Pleads Guilty to U.S. Charge Over Inadequate Anti-Money-Laundering Program
The Wall Street Journal reported that cryptocurrency exchange BitMEX has pleaded guilty in federal court in Manhattan to violating the Bank Secrecy Act (BSA) by failing to maintain an adequate anti-money laundering program.
Prosecutors have alleged that BitMEX, a former leading crypto platform, knowingly conducted business with U.S.-based customers, disregarding BSA rules designed to prevent money laundering.
The plea follows previous legal actions. In 2021, BitMEX entered into settlements with U.S. regulators, agreeing to pay $100 million. In 2022, three founders pleaded guilty to related charges, and each agreed to a $10 million fine.
BitMEX called the latest charge "old news" and stated that it would seek an expedited sentencing hearing. It argued for no further fines due to the amounts already paid by its founders and in previous settlements. The exchange also claimed to have improved its compliance standards since the period in question.
According to prosecutors, BitMEX took on U.S. clients to boost revenue while implementing ineffective mechanisms to prevent U.S. residents from accessing the platform, with executives even promoting the exchange at conferences in the United States.
NYDFS Appoints Crypto Compliance Veteran as Deputy Superintendent
The New York State Department of Financial Services (NYDFS) has hired John Melican, a former prosecutor and compliance expert, as its new deputy superintendent for limited purpose and virtual currency trusts to help supervise and oversee cryptocurrency businesses in the state.
Melican succeeds David Hunter, a former bank examiner at the Office of the Comptroller of the Currency, who has held the position since December 2022.
Before joining the NYDFS, Melican served as the chief legal officer of blockchain analytics firm Elliptic. He also worked as a managing director for risk-management company Exiger, where he led the company's anti-money-laundering, anticorruption, and due diligence practices.
Melican began his career as an assistant district attorney in the Manhattan District Attorney's office, where he spent eight years gaining valuable experience in law enforcement and prosecution.
Melican's appointment is significant as he will play a crucial part in overseeing the growing and evolving cryptocurrency industry in New York.
🔥 This Week's GRC Hot Takes
Hot takes and analysis from those on the shop floor
"We generally try to address [risks] by creating dashboards, but, in my experience, these only really work if there is sufficient text to draw out the issues and explain them," writes Patrick Healy in this thoughtful post about displaying risk data
Why deepfakes are expected to magnify bank fraud, according to this piece from Deloitte.
"Frankly, these attributes are not particularly difficult to model for truly professional internal auditors. That is why it is so appalling, painful and unforgivable when any individual in the profession betrays these ideals for personal gain or spite," writes Richard Chambers.
📺 This Week's GRC Podcast
GRC podcasts to watch and treat your ears to
Gene Scalia, the renowned administrative law litigator and former Secretary of Labor who has been retained by a large bank lobbying group for a potential lawsuit over capital rules, says the overturning of Chevron deference by the Supreme Court last week should be a warning for all regulators.
He explains why in this week's episode of American Banker's podcast.
🧑💼This Week's Hottest GRC Jobs
Make your next career step with MBK Search
Our client, an international apparel brand, is seeking a Senior Accountant to join their growing team in Germany.
Estate Planning Lawyer — Providence, RI
Our client, a leading Providence law firm, is looking for an experience attorney/junior partner to join their growing Estate Planning practice.
Investment Analyst — New York, NY
Our client, a leading secondaries PE firm, is seeking to hire a highly motivated, dynamic Financial Analyst to join their growing team of private equity investment professionals.
At MBK Search, we find world-class talent so you can build champion GRC teams. Let's start building today. Click here to apply for the latest GRC roles.
At MBK Search, we help firms find world-class talent to build champion teams across regulated markets. Let's start building — visit our website to find out how. www.mbksearch.com