10 most popular loss events: ORX News Q4 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 October 2020 and 31 December 2020

1. Citigroup

Published 12 October 2020

Citibank was fined $400 million by the OCC over deficiencies in enterprise wide risk management, compliance risk management, data governance and internal controls. The OCC found that, for several years, Citibank had failed to implement and maintain risk management programmes commensurate with the bank’s size, complexity, and risk profile. Citibank was also required to undertake appropriate remedial actions by the OCC.

BL1001– Corporate Items
EL0402 – Improper Business or Market Practices 

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2. Goldman Sachs

Published 5 November 2020

As of 22 October 2020, Goldman Sachs had paid USD 5.07 billion in settlements over its role in the 1MDB fraud. The settlement includes a $2.5 billion agreement with the Government of Malaysia to settle criminal charges relating to 1MDB, a $2.3 billion criminal penalty and disgorgement of $600 million ordered by the US Department of Justice.

BL0101 – Corporate Finance 
EL0401 – Suitability, Disclosure & Fiduciary

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3. Morgan Stanley

Published 13 October 2020

Morgan Stanley was fined $60 million by the OCC over unsafe data practices. In 2016, Morgan Stanley, following the closure of a data centre, the bank subsequently learned that certain devices had not been completely wiped and some still contained unencrypted data. In 2019, Morgan Stanley also discovered that it could not locate a small number of servers and that small amounts of data remained on them in unencrypted form.

BL0901 – Private Banking
EL0401 – Suitability, Disclosure & Fiduciary

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4. JPMorgan Chase & Co.

Published 02 October 2020

JPMorgan Chase agreed to pay $920.2 million to resolve charges that JPMorgan traders had engaged in spoofing and market manipulation from at least 2008 and 2016. On tens of thousands of occasions, JPMorgan traders knowingly placed spoof orders to buy and sell precious metals futures contracts and US Treasury Futures Contracts.

BL0202 – Global Markets
EL0402 – Improper Business or Market Practices

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5. Wells Fargo

Published 17 November 2020

As of 21 February 2020, Wells Fargo has paid and provisioned at least $6.06 billion over improper trade practices after employees were found to have opened accounts in the names of customers without their knowledge or consent to meet sales targets.

BL0301 – Retail Banking 
EL0401 – Suitability, Disclosure & Fiduciary

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6. JPMorgan Chase & Co.

Published 27 November 2020

JPMorgan Chase was fined $250 million by the OCC for failing to maintain adequate internal controls and an effective internal audit programme for its sizeable fiduciary business. The OCC found that, for several years, JPMorgan had maintained a weak management and control framework for its fiduciary activities and had an insufficient audit programme from these activities.

BL0601 – Custody Services 
EL0401 – Suitability, Disclosure & Fiduciary

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7. Deutsche Bank

Published 13 October 2020

Deutsche Bank was fined €13.5 million by the Frankfurt Public Prosecutor’s Office for failing to submit Suspicious Activity Reports (SARs) in a timely manner. Deutsche Bank had failed to disclose more than a million suspect money transfers with Danske Bank for approximately five years. Deutsche Bank was cleared of money laundering allegations due to insufficient evidence.

BL0401 – Commercial Banking
EL0402 – Improper Business or Market Practices

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8. Japan Exchange Group

Published 03 December 2020

The Tokyo Stock Exchange (TSE) halted all trading on 1 October 2020 after a system problem caused by a faulty hardware which did not back up properly. Trading was suspended from the start of the morning session as the exchange could not switch to an alternative trading mechanism.

BL0201 – Equities
EL0601 – Technology & Infrastructure Failure

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9. Citigroup

Published 01 October 2020

Three Citigroup entities were fined $4.5 million by the CFTC over design flaws in their audio preservation system, which deleted audio recordings which had been subpoenaed by the CFTC. The design flaw meant that older recording were deleted to make space for newer recordings due to the system’s retention rule being set incorrectly.

BL1001 – Corporate Items
EL0702 – Monitoring Reporting

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10. USAA Capital Corporation

Published 19 October 2020

USAA Federal Savings Bank was fined $85 million by the OCC for its failure to implement and maintain an effective compliance risk management programme and an effective IT risk governance programme. The OCC also found that USAA had deficiencies in all three lines of defences. The deficiencies also reportedly caused violations of law.

BL1001 – Corporate Items
EL0402 – Improper Business or Market Practices

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