Case dismissed against Barclays trader; AML reports snare another bank

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Case dismissed
A federal judge in San Francisco threw out the case against Robert Bogucki, a Barclays trader who was accused by the Justice Department of front-running a £6 billion currency deal involving Hewlett-Packard, handing “another defeat to U.S. prosecutors attempting to jail bankers for alleged misconduct.” The judge, Charles Breyer, said Bogucki “violated no clear rule or regulation. The court cannot permit this case to go to the jury on such a basis.”

“The decision is the latest blow to U.S. efforts to police financial markets by focusing on prosecuting individuals, after winning billions of dollars in fines from the banks themselves,” the Financial Times says.

Breyer’s “rare step” in dismissing the case “before the jury rendered its verdict … will prevent federal prosecutors from filing an appeal” and “demonstrated the challenge that prosecutors face in securing guilty verdicts against individual Wall Street bankers.”

On alert
European banks, including ABN Amro, Commerzbank and ING, “are investing more resources in staff and technology to spot financial crime following a recent string of money-laundering scandals. In some cases, they’re cutting costs elsewhere in the enterprise to fund the initiatives.”

“Banks in Europe are under particular pressure to demonstrate they have strengthened their money-laundering detection tools” following several “high-profile money-laundering scandals over the past year,” such as the one at Danske Bank.

And not a moment too soon. On Monday “media reports linked Nordea, the region’s biggest bank, to about €700 million in suspicious money flows from Russia and other former Soviet states. The lender, which last year moved its headquarters from Sweden to Finland, has already been sucked into a money-laundering scandal that has also hit Danske Bank and Stockholm-based Swedbank.”

“We recognize that our systems in the past may not have been robust enough to counter this sort of financial crime,” Nordea said. “For that we are truly sorry.”

Wall Street Journal

Another issue
British and European banks could be forced to “make changes to their bank accounts and cash pools to avoid higher fees and meet regulatory requirements” in the event of a no-deal Brexit. “If the U.K. exits the [European Union] without a withdrawal agreement, regulations that have smoothed the flow of payments between the U.K. and the rest of the EU could cease to apply to the U.K. That would require British and European companies to assess their bank accounts and payment profiles.” The European Payments Council is expected to rule on Thursday whether the U.K. can remain part of the single euro payments area.

Financial Times

More trouble
Revolut, the U.K. digital bank, is being investigated by London police about a suspicious money transfer, “adding further pressure to a fintech company that is already facing probes on other issues from regulators. The company is best-known for its consumer banking services, but the case being investigated by police relates to its Revolut for Business service, which provides multicurrency accounts with free currency exchange and international transfers for small and medium-sized businesses.”

Washington Post

Big bucks
There are now more $100 bills in circulation than $1 and $20 bills, “a puzzling surge” that has “resurrected debate on the need for three-digit currency at all — given their favor with criminals around the globe.” Most of the Benjamins aren’t even in the U.S. “A 2018 research paper from the Federal Reserve Bank of Chicago estimates as much as 80% of the 12 billion $100 bills in circulation live outside the country. Some of this growth is likely a result of the U.S. dollar supplanting local currencies in unstable economic environments.”


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