Rabobank NA Admits to Anti-Money Laundering Deficiencies, Will Pay Nearly $369M
Rabobank National Association, a subsidiary of Rabobank UA (RABO), has pleaded guilty to felony conspiracy for obstructing the Department of the Treasury’s Office of the Comptroller of the Currency’s examination of the bank while hiding that its anti-money laundering program had certain deficiencies. Now, the firm will pay almost $369M for not preventing illicit funds from going through the bank.
With its guilty plea, Rabobank is admitting that it conspired with a number of its ex-executives to try defrauding the US by “unlawfully impeding” the OCC’s efforts to regulate the California subsidiary, including obstruction of an OCC examination of the bank’s branches throughout the state. Rabobank acknowledged that because of deficiencies in its AML program, the bank made it possible for hundreds of millions of dollars from Mexico and other places to be deposited in its rural bank branches and then allowed to money to move via checks, wire transfers, and withdrawals. Federal regulators were not notified even though they should have been.
During a 2012 OCC examination, Rabobank executives purposely tried to “hide and minimize” its AML program deficiencies so as to avoid new sanctions. Rabobank was already sanctioned in ’06 and ’08 for failures that were “nearly identical” to the ones at issue now. Late last year, ex-Rabobank VP George Martin reached a deferred prosecution deal with the US government for aiding and abetting the bank in not having an AML program that met Bank Secrecy Act requirements.
Alabama Supreme Court Says Derivative Fraud Lawsuit Against Sterne Agee Can Move Ahead
In an 8-0 ruling, the Alabama Supreme Court decided that a derivative lawsuit brought against Sterne Agee by two of the firm’s ex-board of directors can proceed. The complaint contends that the board lowered the value of the privately-owned firm after misappropriating money and spending funds lavishly. The plaintiffs believe that the decision to sell Sterne Agee to Stifel (SF) was done to conceal such inappropriate behaviors.
The lawsuit accuses then-Sterne Agee CEO James Holbrook Jr. of using the firm’s funds to buy expensive jewelry and women’s shoes, as well as luxury boats and condos in multiple states, which were primarily for Holbrook’s use. The plaintiffs claim that Holbrook’s wife was on the investment firm’s payroll even though she didn’t do any work for the company. They are accusing Sterne Agee of numerous claims, including fraud and breach of fiduciary duty.
Prior to being sold to Stifel, Sterne Agee mandated that shareholders withdraw any pending litigation against it or they wouldn’t receive their share of the proceeds. The plaintiffs, however, are claiming that this was an unenforceable agreement because the reason the bank sale happened at all was due to the allegedly wrongful behavior that the board was trying to conceal.
Maryland AG Orders Wealth Management Firm to Cease and Desist Operations
In Maryland, the state’s attorney general is ordering High Point Wealth Management to cease and desist operations. The firm is accused of fraud.
Maryland Attorney General Brian Frosh said that High Point, which took over Everest Wealth Management’s offices in Towson, solicited the latter’s clients and gave them investment advice even though High Point’s CEO and owner, Perry C. Santillo Jr., was never registered in the state as a brokerage firm, brokerage firm agent, investment adviser, or investment adviser representative.
Rabobank Unit to Forfeit $369 Million to Settle Money-Laundering Probe, The Wall Street Journal, February 7, 2018
Lawsuit against Sterne Agee can move forward, Alabama Supreme Court rules, AL.com, February 9, 2018
Maryland AG orders halt to Towson investment advisory in former Everest offices, The Baltimore Sun, February 2, 2018
More Blog Posts from SSEK Law Firm:
SEC Stops Alleged $5.3M Hedge Fund Fraud Involving Willow Creek Advisors, Institutional Investor Securities Blog, February 5, 2018
Barclays Capital Trader is Indicted in Massive Front Running Scam, Institutional Investor Securities Blog, January 17, 2018
Multimillion-Dollar Investment Adviser Fraud Cases Target Widows, Older Investors, and Other Retail Investors, Stockbroker Fraud Blog, December 28, 2017