The Equifax Breach and 5 Years of Missed Warning Signs

Reports that Equifax’s chief information officer along with their chief security officer were retiring should alleviate few concerns and not divert scrutiny from the company’s risk governance standards. While this is not the largest data breach in history, it is quite possibly the most damaging. This data breach is different in kind and much more harmful than anything before it, primarily because it reveals personally identifiable information on nearly 100% of the U.S. workforce, as well as private information on consumers from other countries. Had Europe’s General Data Protection Regulation (GDPR) been in force, Equifax would not only face the raft of litigation in the U.S., alongside a growing number of government investigations, it would also be in breach of the world’s most stringent privacy standards – resulting in hefty fines of up to 4% of the company’s worldwide sales or €20 million. While the company’s technology leaders were quick to fall on their own swords, this case reveals that cyber security is an executive level priority inconveniently cutting across the c-suite and not a risk that conforms to clean organizational siloes. The Equifax breach is another painful example teaching us that cyber resilience begins and ends with the board and senior executives. What Equifax’s annual reports tell us about their attentiveness to risk, readiness and resilience is alarming. read more »

Braskem Signs $10 Million Settlement Over Bribery Scandal

Brazilian petrochemical company Braskem SA signed a proposed settlement agreeing to pay U.S. investors $10 million for concealing its role in the corruption scandal centered around the state-owned oil company. read more »

South African Opposition to Lay Criminal Complaint Against McKinsey

South Africa's opposition Democratic Alliance will lay a criminal complaint against McKinsey for "fraud, racketeering and collusion" over work the global consultancy did with businessmen friends of President Jacob Zuma, it said on Monday.

Reuters reported last week that McKinsey ignored suspicions raised over several years by local senior staff that companies it worked with were set up to steer state contracts.

The deal relates to work McKinsey carried out for South African state power company Eskom alongside Trillian, a firm controlled by the Gupta family.

Libor rates ‘still open to rigging’ claims whistleblower

Libor is “more open to manipulation” than ever before despite wholesale reform of how the benchmark rate is calculated, a whistleblower claims.

Behzad Goharian, who was responsible for Libor submissions at UBS until a few months ago, alleges there are still “catastrophic” failings in the way the interest rate is set and monitored.

In documents lodged at the central London employment tribunal, Goharian alleges that “relatively small transactions” could be used by banks to sway the rate in their favour.

The London interbank offered rate underpins the value of $350 trillion (£258 trillion) of financial products. Several former traders have stood trial over claims that they rigged the rate in exchange for favours from clients or to secure a bigger bonus. read more »

SunTrust Charged With Improperly Recommending Higher-Fee Mutual Funds

The Securities and Exchange Commission today charged the investment services subsidiary of SunTrust Banks with collecting more than $1.1 million in avoidable fees from clients by improperly recommending more expensive share classes of various mutual funds when cheaper shares of the same funds were available.

SunTrust Investment Services has agreed to pay a penalty of more than $1.1 million to settle the charges.  SunTrust separately began refunding the overcharged fees plus interest to affected clients after the SEC started its investigation.  SEC examiners cited the practice during a compliance review of the firm in mid-2015.  More than 4,500 accounts were affected. read more »