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A recent bevy of civil complaints brought against financial institutions by victims of Ponzi schemes raises questions over the extent to which financial institutions can detect and prevent large scale fraud perpetrated by their own customers, say sources.
An expected U.S. Treasury Department regulation aimed at improving corporate transparency may do more than task banks with additional recordkeeping. It could also expose financial institutions to greater civil liability when compliance goes wrong.
Several domestic and international banks are retraining investigators tasked with identifying fraud and money laundering to better uncover Ponzi schemes, say compliance officers and consultants.
Federal financial regulators are questioning TD Bank about potential Bank Secrecy Act compliance lapses identified in the wake of the conviction of Florida-based Ponzi schemer Scott Rothstein, say sources.
JPMorgan Chase is likely to lose its legal fight with the U.S. Treasury Department over whether it must turn over documents related to convicted Ponzi schemer Bernard Madoff, say former government officials.
Identifying good guys and bad guys in real life is complicated: court documents released this month in connection with investors' lawsuits against the banks that served Ponzi schemer Scott Rothstein don't always make it clear - except with regard to Rothstein himself - who the villains are.
Toronto-Dominion Bank must pay a Texas investment company $67 million for its role in helping convicted attorney Scott Rothstein run a $1.2 billion Ponzi scheme, a Miami jury ruled Wednesday.
Hedge fund manager Bernard Madoff pleaded guilty Thursday to bilking investors out of $65 billion and laundering the money as part of a Ponzi scheme that dwarfed similar swindles.
The investigation into a $50 billion securities fraud by a former chairman of the Nasdaq stock market may mean more scrutiny for banks that took him as a client, according to a financial investigator.
