ORX News digests of the month: Q4 2019

  • 27 January 2020

Every month the ORX News team publishes a featured digest from the ORX News service. It's a detailed look at one of the operational risk losses reported in the media that month, and is handpicked by the team as one of the most interesting stories.

Read on for all the featured summaries from Q3 2019.

December: UBS ordered to pay USD 11.2 million by FINRA arbitrators over employee defamation claim

A US Financial Industry Regulatory Authority (FINRA) arbitration panel ordered UBS to pay $11.2m in damages, costs and fees following a defamation claim first filed in June 2018 by former employee Mark Munizzi.

UBS reportedly fired Munizzi from his position as a market operations supervisor in April 2018 after two accounts he oversaw lost value during a steep market drop two months earlier. UBS claimed that Munizzi had failed to act on margin calls and lied during an internal review of the incident. UBS also claimed that Munizzi had failed to properly supervise the risks of an uncovered options strategy.

However, Munizzi said that he was not notified about the margin calls on the two accounts and that when he did become aware of the issues, he took immediate steps to cover the unsecured positions.

Munizzi alleged that UBS had defamed him through the description provided in his Form U5 and that this prevented him from finding a new job in the industry. Munizzi also said that he was owed severance from UBS, and that UBS had violated the Illinois wage Payment and Collection Act.

The panel ordered UBS to pay $11.2m to Munizzi and $39,000 in FINRA fees, and recommended amendments to Munizzi’s Form U5. As of December 2019, UBS denied all allegations.

If your firm subscribes to ORX News, then you can read the full story and others like it on the ORX News website.

Download the featured digest from ORX News

ORX News digest of the month, December 2019

November: JPMorgan agrees to pay USD 3.8 million class action settlement over unpaid overtime

JPMorgan Chase preliminarily agreed to pay $3.8m to settle class-action claims that it had failed to remunerate call centre staff for work carried out off the clock. A complaint was first filed in 2017 under the Fair Labor Standards Act (FLSA).

From 14 December 2014, JP Morgan allegedly failed to pay straight time and overtime wages, pay the minimum wage, provide accurate wage statements, provide meal and rest breaks, and maintain accurate records. The firm was also accused of wage theft, improper wage payments, and improper wage deductions.

JPMorgan’s policy allegedly required that all call centre employees were ready to take a phone call the moment their official shift started. This required them to turn on their computers, start up to 10 separate programs, and log in, which took up to an hour. This meant that every week, employees worked between two and a half to five hours without compensation.

ORX News subscribers can read the full story on the ORX News website.

Download November's featured digest

October: Millennium Bim fined MZN 76 million by Bank of Mozambique for AML and CTF violations

Mozambique’s central bank fined Millennium Bim, a subsidiary or Portuguese Commercial Bank, 76m meticais ($1.2m) for violating the country’s law on anti-money laundering (AML) and counter-terrorist financing (CTF) between the financial years of 2014 and 2018.

Millenium Bim failed to identify and verify customers, continuously monitor business relationships, maintain documents and immediately report suspicious transactions.

The Bank of Mozambique fined Millennium Bim as part of a wider action. In total, the Bank of Mozambique issued 20 fines totalling 172.9m meticais ($2.7m) to 18 firms, including Barclays, Société Générale and Standard Bank. The remaining fines ranged from 100,000 meticais ($2,000) to 28m meticais ($443,000). Between the financial years of 2013 and 2019, the 18 firms violated the AML and CTF law and a law on credit institutions and financial entities.

ORX News subscribers can read the full story on the ORX News website.

Download October's featured digest

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