10 most popular loss events: ORX News Q3 2020

Each quarter, ORX News publishes a free summary of the ten most-read loss events in the ORX News database. These stories include some of the largest and most interesting losses from around the globe reported on by the ORX News team.

The loss events are ranked by number of views, and summarised with their business line and event type. If you're already an ORX News subscriber, then you can log into the ORX News site to get more analysis and information about each story.

ORX News is an industry-leading provider of publicly reported operational risk loss events. Subscribing to ORX News means you can stay up to date with the latest losses, discover trends and read in-depth analysis.

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Top 10 op risk stories on the ORX News site between 1 July 2020 and 30 September 2020

1. Citigroup

Published 27 August 2020

Citigroup mistakenly wired $900 million to a group of lenders on behalf of make-up company Revlon. The bank had intended to make accrued interest payments while performing its duty as the agreed administrative agent for a loan the lenders had made to Revlon in 2016. Citigroup immediately attempted to recover the funds. But, as of 21 August 2020, Citigroup had filed lawsuits to reclaim $520.4 million, which was still outstanding.

BL0401– Commercial Banking
EL0701 – Transaction Capture, Execution & Maintenance 

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2. Capital One

Published 10 August 2020

Capital One was fined $80 million by the US Office of the Comptroller of the Currency for failing to establish effective cyber risk assessment processes and failing to correct these deficiencies in a timely manner. The deficiencies came to light following a data breach in April 2019, where hackers stole the information of 106 million credit card applicants.

BL0301 – Retail Banking 
EL0401 – Suitability, Disclosure & Fiduciary

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3. Goldman Sachs

Published 17 September 2020

In July 2020, Goldman Sachs reached a $2.5 billion agreement with the Government of Malaysia to settle criminal charges relating to the bank’s involvement in the 1MBD fraud. As part of the settlement, Goldman Sachs guaranteed that the Government of Malaysia would receive at least $1.4 billion in proceeds from assets traceable to the “diverted proceeds of three bond offerings Goldman Sachs underwrote for 1MDB in 2012 and 2013.

BL0101 – Corporate Finance
EL0401 – Suitability, Disclosure & Fiduciary

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4. Credit Suisse

Published 09 September 2020

Credit Suisse was ordered by a Swiss Federal court to pay €4 million to a company who was defrauded in a CEO fraud. The court determined that Credit Suisse had a breached its contract by authorising the fraudulent payments via email rather than with two signatures as the contract stipulated.

BL0401 – Commercial Banking
EL0402 – Suitability, Disclosure & Fiduciary

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5. Deutsche Bank

Published 10 July 2020

Deutsche Bank was ordered to pay a $150 million fine by the New York State Department of Financial Services over compliance failures. The failures related to the bank’s business relationships with Jeffrey Epstein, FBME Bank and Danske Bank Estonia. The DFS found that Deutsche Bank ignored several red flags when processing payments on behalf of Epstein, FBME and Danske Bank Estonia.

BL0901 – Private Banking
EL0401 – Improper Business or Market Practices

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6. Bank of Nova Scotia

Published 25 August 2020

Scotiabank was ordered to pay over $127.4 million for multiple precious metals price manipulations. The US DoJ and CFTC found that Scotiabank had conducted multiple episodes of spoofing on the commodities futures contract markets and making false statements.

BL0202 – Global Markets
EL0401 – Improper Business or Market Practices

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7. Bank of Ireland

Published 31 July 2020

The Bank of Ireland was fined €1.7 million by the Irish Central Bank over regulatory failings related to a cyber fraud which occurred in September 2014. Staff at the bank’s private banking subsidiary ignored numerous red flags and did not follow the third party payments procedures when acting on instructions from a fraudster impersonating a client.

BL0901 – Private Banking
EL0704 – Customer/Client Account Management

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8. TD Bank Group

Published 24 August 2020

TD Bank was ordered to pay $122 million in restitution by the US Consumer Financial Protection Bureau over its overdraft enrolment practices. The CFPB found that TD Bank had failed to obtain consumers’ affirmative consent to enrol them in an overdraft protection service by not providing them with a written overdraft notice.

BL0302 – Card Services
EL0402 – Suitability, Disclosure & Fiduciary

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9. Rabobank

Published 08 September 2020

Rabobank lost up to €160 million after the Mexican Government seized nine ships pledged to the bank as collateral on a loan. The Mexican Government seized the ships after an alleged fraud at the ships’ owner. After Rabobank had received the ships back off of the government, they had depreciated in value due to lack of maintenance. Rabobank has filed a claim against the Mexican Government.

BL0401 – Commercial Banking
EL0701 – Transaction Capture, Execution & Maintenance 

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10. Wirecard

Published 03 July 2020

Wirecard disclosed that €1.9 billion of cash balances on its trust accounts was missing. In June 2020, Wirecard admitted that the €1.9 billion of cash balances might never have existed and that fraudulent transactions to the detriment of Wirecard might have occurred. 

BL0501 – Cash Clearing
EL0102 – Internal Theft & Fraud

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