Saturday, June 14, 2014


In the present climate of civil litigation against bankers, those who allow AML or CFT deficiencies that result in regulatory action, and who are failing to maintain an effective and robust compliance program at their bank, are at risk. I have seen seven major civil law firms posting news releases this week, seeking to contact existing shareholders of The Bancorp Inc., the bank holding company of Bancorp Bank. Readers who have not yet read my recent article about regulatory action against the bank can find it here; it was posted on June 11. Scroll down to access it, or click on the link on the lower right-hand corner of this blog, where the titles of prior articles appear as hyperlinks. It is fifth from the top.

The value of the bank's stock continues to fall, increasing the measure of damages for the potential plaintiffs. Securities consultants have retreated from their pre-Consent Order recommendations for investors to purchase Bancorp stock, which may cause even further decline in the stock's market price.

Reports from individuals with personal knowledge indicate that the Customer Identification program at Bancorp Bank did not meet the generally accepted standards of banking best practices, and in many instances, not even the full names of customers were not obtained at account opening, which may indicate that there was compliance malpractice. The utter arrogance of any bankers who do not believe they must properly identify their customers amazes me in the post 9/11 environment. If you are contacted by any former Bancorp compliance staff seeking employment at your bank in the future, please show them the door.

 Which bank officers and directors are to be named as parties defendant is not known, but senior bank management are generally the usual targets of such litigation, as well as those in command of the compliance program.  A Bancorp press release claims that it has already implemented "multiple upgrades", and hired a "qualified" BSA/AML officer, but one certainly wonders whether these statements are merely for public relations purposes, and whether there is any factual basis for them.


  1. I would disagree with your point about compliance professionals. They are not ultimate decision makers. All they can do is recommend or resign. It is the institution's board and executive management that should carry that burden as they control resources committed to BSA compliance --- both human and IT --- that are necessary to correct deficiencies. They also help to establish a culture of compliance that compels commitment and accountability to compliance.

  2. Compliance Officers in the banks cause all the problems with their Control Freak attitude. Check out HSBC and Standard Chartered and the billions that they paid out. Compliance Officers do get indicted and deserve to go to prison.

  3. Excellent article! We dismissed our 3 compliance officers for not conducting their work diligently and spending time at coffee breaks and long lunches or gabbing with co workers about their dates last night. I agree that compliance officers are the responsible culprits in most banks and corporations and their lack of professional ethics is disgusting.

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