Tag:finance
The I.R.S. is using AI to Crack Down on Tax Evasion
The Internal Revenue Service (I.R.S.) issued a press release on September 8, 2023, detailing how the agency plans to use at least part of the $80 million dollar allocation it received from the Inflation Reduction Act last year. I.R.S. Commissioner Danny Werfel plans to use the funds to make compliance enforcement efforts and tax evasion identification more effective and efficient. How does he plan to do this? The overwhelmed and perhaps overworked agency will be using artificial intelligence (AI) programs and features to expedite and assist with redundant processes as well as to audit parties that are too complicated or large for the I.R.S.’s current capabilities.
Navigating the AI Frontier: Securing the Future of Financial Services
As artificial intelligence becomes more available, apprehension regarding its potential impact on security and data protection grows, especially within the financial services sector. AI technology undoubtedly provides some benefits to the financial sector by offering services that would otherwise be unwieldy, inefficient, time-consuming, and costly when undertaken by humans. The financial services sector is no stranger to security risks and with the increased prevalence of AI, the threat landscape grows larger, especially when considering the financial sector’s increasing dependence on web applications and APIs.
Do More Bank Failures Equal More Bank Regulations?
The recent closures of Silicon Valley Bank and Signature Bank, the second and third largest bank failures in U.S. history, have sparked intense discussions pertaining to banking regulations and resulted in both statements and ongoing investigations by the Biden administration, members of Congress, the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and U.S. Government Accountability Office (GAO).
Democrats in Washington Push For Stronger Banking Regulations
The Biden Administration acted strongly last month in response to the recent collapses of Silicon Valley Bank (SVB) and Signature Bank. Each collapse sent shockwaves through the U.S. banking system and shook the confidence of consumers nationwide. The Biden Administration showed swift and steady leadership in urgently addressing the crisis. The President and leading Democrats in Congress continue to push for stronger regulatory oversight with respect to the banks. This shows that the Democrats are on the right side of the banking issue, as they have been for the 16 years following the 2008 financial crisis.
The Role of Regulators During the Collapse of Silicon Valley Bank
On March 10th, 2023, Silicon Valley Bank (SVB) collapsed practically overnight, followed only two days later by the collapse of Signature Bank. Prior to its collapse, SVB uniquely served a single category of customers – start-ups. As the largest bank failure since the 2008 financial crisis, SVB’s bankruptcy resulted in significant consequences for the tech industry. While SVB has since been acquired by First Citizens BancShares, the House Financial Services Committee is currently seeking answers from both regulators and SVB executives about how such a failure could have occurred and how to prevent it from happening again.
U.S. Regulators are Employing New Strategies to Crack Down on Historically Challenging Insider Trading Cases
In the past, insider trading cases have been considered difficult to prove and prosecute. These cases usually require extensive evidence-gathering coupled with a high burden of proof. However, the Securities and Exchange Commission (SEC) and Justice Department are now turning to new developments in technology and regulatory efforts that have led to an increased focus on investigating and prosecuting insider trading cases. Why were these cases hard to prove in the past and what exactly are these new technologies?
Justice Department Hitting Corporate Executive Lawbreakers Where it Hurts
The Justice Department introduced a new pilot program last week that encourages companies to center their compensation policies around rewarding good behavior and punishing those partaking in criminal activity. Deputy Attorney General, Lisa Monaco, previewed the program at an American Bar Association conference in Miami.
Regulatory Scrutiny of Crypto Exchange “Binance” May Cause it to Leave the U.S.
State and federal regulators are opposing a billion-dollar deal between the cryptocurrency exchange Binance.US and the bankrupt cryptocurrency lender Voyager. The regulatory intervention is part of an ongoing struggle between Binance, the ultra-dominant cryptocurrency exchange, and U.S. regulators. Tensions between the two appear to be nearing a boiling point. The dispute also highlights an American regulatory environment that is increasingly hostile toward the cryptocurrency industry writ large, particularly in the wake of the FTX cryptocurrency exchange collapse.
Deutsche Bank Reorganization Results in New Compliance Chief
Deutsche Bank, the multinational investment banking and financial services company, will name Laura Padovani as its new Chief Compliance Officer. The move comes as part of a broader reorganization in the company’s compliance division, taking place in the aftermath of regulatory investigations in the United States and Germany. The regulatory investigations of Deutsche Bank over the last several years concern the organization’s questionable practices as it relates to money laundering and other offenses. The investigations also involve massively high-profile individuals, such as Jeffrey Epstein and Donald Trump.
Coinbase Global Inc. Settlement Raises More Questions for Financial Regulators
On January 4th, 2023, the New York State Department of Financial Services made public that a $100 million settlement with the cryptocurrency exchange Coinbase Global Inc. (Coinbase) has been agreed to. The settlement follows an enforcement action imposed this past August aiming to regulate cryptocurrencies. With a lot of discussion happening given the recent collapse of FTX and anti-money laundering violations by Robinhood Markets, this action begs the question: should the digital currency industry be regulated nationwide and, if so, what should these regulatory agendas look like?