negligence (5)

8028256900?profile=originalThe blows keep on coming for Wells Fargo. Within a year of their cross-selling scandal, two more scandals have risen to the top of news headlines.

In part one of this series, I set out to make good on a prediction I presented to business journalist L.A. Winokur. I predicted that after the dust settled for the original cross-selling scandal, Wells Fargo would remain vulnerable in other areas of its operations, lest they address the gaps in their risk management program.

In the time it took me to ex

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8028264866?profile=originalIn a recent interview I had with business journalist L.A. Winokur regarding the Wells Fargo cross-selling scandal, I made a prediction: “Once the dust of this scandal settles, perhaps in two or three years, Wells Fargo will remain vulnerable in other areas of its operations to risk management failures.”

Low and behold, the only part I didn’t get right was the timeline. In less than a year of paying $185 million in penalties, the largest fine ever levied by the CFPB, the bank finds itself in headl

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8028246098?profile=originalPlains All American Pipeline, a major player in the oil and gas industry, faces $2.8 million in fines, and a grand jury indicted the company on 46 criminal charges – four of them felonies – according to The Wall Street Journal.

Additionally, a Plains employee is being individually charged and faces a multi-year prison term. This is part of a trend set in motion in 2015, when the Department of Justice announced a new policy. It now prosecutes corporate individuals for negligence in risk and compl

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Increased Board Accountability is Real

8028244294?profile=originalBy this point, the Volkswagen scandal is old news (we first blogged about it last October). Yet details about the case continue to emerge, most recently about board accountability. As of last week, a Volkswagen “internal probe into its emissions-cheating scandal found no evidence of wrongdoing by members of senior management…” In other words, VW’s Board didn’t know about the deception until it was too late.

This might appear to be a good thing, but actually VW is making its situation worse. Why?

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Last month, the Consumer Financial Protection Bureau (CFPB) investigated Dwolla, an e-commerce and online-payment company. It found Dwolla guilty of risk management negligence regarding data security practices.

The investigation has some significant implications. Before we take a deeper look, here are a few key takeaways:

  1. Dwolla payed a civil penalty of $100,000, despite the fact that it did not suffer a data breach. This indicates “a broader trend among regulators to change the focus of enforceme
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