Compliance & Ethics

In a fresh move aimed at tightening oversight on key players behind the scenes of the financial sector, the Prudential Regulation Authority (PRA), the Bank of England, and the Financial Conduct Authority (FCA) today introduced a framework to bring critical third parties (CTPs) under closer watch. With operational resilience as the focal point, this guidance outlines how these regulators will apply their new oversight powers to major tech firms, data processors, and essential service providers that keep UK finance running smoothly – or could, in a worst-case scenario, pose systemic risks if they stumble.

The Financial Conduct Authority (FCA) has handed Metro Bank PLC a £16,675,200 fine, accusing it of leaving the door wide open to potential money laundering risks due to poor transaction monitoring systems that went unchecked for over four years.

Venezuela’s Telefónica Venezolana—a subsidiary of Spanish telecom giant Telefónica S.A.—has agreed to pay over $85 million to resolve allegations of bribery. The telecom firm admitted to a scheme involving payments to Venezuelan officials to gain preferential access to U.S. dollars through a government currency auction, a critical exchange in a nation with tight foreign currency controls. This DOJ settlement spotlights not only the costs of corporate corruption but also the lengths companies sometimes go to work around challenging market conditions in places like Venezuela.

The Consumer Financial Protection Bureau (CFPB) has ordered Navy Federal Credit Union to pay over $95 million to settle allegations of “surprise” overdraft fees that blindsided millions of customers. The penalty includes $80 million in refunds to consumers and a $15 million fine that will go to the CFPB’s victims relief fund, marking the largest amount the CFPB has ever clawed back from a credit union.

Invesco Advisers, Inc. is paying a hefty price for misleading clients and investors about how much of its assets were truly aligned with environmental, social, and governance (ESG) principles. The Atlanta-based investment firm has agreed to settle with the U.S. Securities and Exchange Commission (SEC), which has charged the company with inflating the percentage of its assets that were “ESG integrated.” As part of the settlement, Invesco will pay a $17.5 million civil penalty.

Morgan Stanley recently took another compliance hit, adding to its ongoing tangle with regulators. In a Letter of Acceptance, Waiver, and Consent (AWC) submitted to FINRA, Morgan Stanley agreed to a settlement for alleged rule violations related to market access controls—an agreement that, if accepted, would shield the firm from future actions tied to the same issues. This latest chapter is part of an ongoing saga involving market access rule violations, with Morgan Stanley previously settling similar allegations just a few years ago.

JP Morgan is once again in the regulatory spotlight. The SEC today announced a significant enforcement action against two JP Morgan affiliates, resulting in a $151 million settlement over a range of practices the SEC says fell short of investor protection standards. J.P. Morgan Securities LLC (JPMS) and J.P. Morgan Investment Management Inc. (JPMIM) now face the consequences of alleged breaches that range from misleading disclosures to pushing costly financial products without adequate disclosures about their conflicts of interest.