Compliance & Ethics

The Federal Court of Australia has ordered ASX to pay a civil penalty of $13.5 million (AUD 20.5 million) after the exchange admitted that a market announcement misled investors by stating the Clearing House Electronic Subregister System (CHESS) replacement project was "progressing well." The court also ordered ASX to pay $2.0 million (AUD 3 million) toward the Australian Securities and Investments Commission's legal costs, bringing another chapter of the long-running project to a close, though not one likely to be forgotten quickly.

The work of fighting money laundering has always invited a certain temptation: to mistake the existence of controls for the existence of control. Japan's Financial Services Agency is now pushing firmly against that instinct. In its latest assessment of anti-money laundering, counter-terrorist financing and financial crime efforts, the regulator makes clear that the question facing financial institutions is no longer whether they have built the necessary frameworks. It is whether those frameworks can withstand contact with the world as it actually is.

The Federal Trade Commission announced that Hopper has agreed to pay $35 million to settle allegations that they charged consumers fees without their informed consent while misleading users about the cost of bookings and the benefits of some of the company's paid services. The proposed settlement also bars the company from deceiving consumers about fees and requires it to clearly disclose the total price of goods and services, the fees and charges associated with them, and the final amount consumers will pay before completing a transaction.

The European Securities and Markets Authority has fined Moody's Deutschland €2.145 million after finding the firm committed four breaches of the Credit Rating Agencies Regulation by failing to provide complete, accurate and up-to-date data. The regulator also issued a public notice alongside the financial penalty.

Alibaba had policies forbidding merchants from selling illegal pharmaceuticals, listed chemicals and pharmaceutical counterfeiting equipment through its marketplaces. Employees questioned whether those policies were working. Merchants found ways around them. Some shifted conversations into Alibaba's private messaging system before directing buyers to encrypted third-party platforms. Others continued operating even after concerns had been identified. According to the U.S. Department of Justice, the controls never kept pace with the activity they were supposed to stop. That failure has now produced one of the largest corporate resolutions involving online marketplace compliance.

Two foreign firms that supported offshore retail commodity trading platforms have agreed to pay a combined $2.5 million after the U.S. Commodity Futures Trading Commission found they facilitated illegal off-exchange leveraged or margined commodity transactions involving U.S. customers who did not qualify as eligible contract participants.

The European Commission brought together cloud providers, business users, software providers and technical experts on July 1 as it continued its examination of cloud computing services under the Digital Markets Act with a stakeholder roundtable to test the evidence it has gathered and explore where today's cloud market may still fall short of the competition and fairness the legislation is intended to promote.