January 18, 2022
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Internal Audit Watch
Morgan Stanley will pay a $60 million settlement in a lawsuit seeking class status on behalf of about 15 million of the bank's customers, who stand to receive two years or more of fraud insurance coverage and reimbursement of as much as $10,000 in out-of-pocket losses. The lawsuit alleged that Morgan Stanley exposed the customers' personal data in 2016 by reselling some equipment from legacy wealth management systems to unauthorized third parties without ensuring the equipment was properly decommissioned.
Full Story: Reuters (1/3) 
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Online events-betting platform Polymarket will pay the Commodity Futures Trading Commission $1.4 million to settle allegations of unlawful trading, and it also must wind down noncompliant contracts and refund participants' money. "All derivatives markets must operate within the bounds of the law regardless of the technology used, and particularly including those in the so-called decentralized finance or 'DeFi' space," said Vincent McGonagle, the CFTC's acting director of enforcement.
Full Story: Cointelegraph (1/4),  BNN Bloomberg (Canada) (1/3),  CoinDesk (UK) (1/4) 
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Online Testing for CIA Exam
Becoming a Certified Internal Auditor (CIA) proves credibility and proficiency. Earn the only globally recognized internal audit certification online. Learn more.
Risk Management
Nineteen banks, including Bank of America and Wells Fargo, have joined forces on a climate change initiative that focuses on measuring and managing risk. "I think it behooves us -- just like we do with any other area of risk -- to really understand what could play out, what could happen, and then just build out our processes to manage it well," says BofA climate risk executive Mary Obasi, who leads the project.
Full Story: The Wall Street Journal (1/12) 
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Experts want the Office of the Comptroller of the Currency to integrate climate risk into bank examinations. The call comes as the OCC takes feedback until Feb. 14 on draft guidelines for a risk-based approach to supervision.
Full Story: Risk (subscription required) (1/12) 
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GAM 2022 Registration Open
GAM remains on the cutting edge of top-tier events for top-level internal audit leaders. Get ready to immerse yourself in an interactive experience like no other and engage with industry leaders. Register early and save.
Regulation & Compliance
The Texas office of the Securities and Exchange Commission is looking into banks' disclosures regarding business with controversial clients such as gun manufacturers and fossil fuel companies, sources say, adding further headaches for lenders as they attempt to navigate the state's laws prohibiting discrimination against such companies. SEC enforcement staff reportedly have asked some banks to substantiate their environmental, social and governance-related claims.
Full Story: Reuters (1/5) 
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Sarah Bloom Raskin, a former official at the Treasury Department and the Federal Reserve, will be nominated the Fed's vice chair for supervision and will play a pivotal role for banks if confirmed, including finalizing capital rules, adjusting stress tests and potentially increasing scrutiny of mergers and acquisitions, University of Michigan business law professor Jeremy Kress says. Banks could also feel an effect if matters such as capital surcharges and leverage ratios are not changed, Davis Polk & Wardwell lawyer Margaret Tahyar says.
Full Story: The Hill (1/13),  The Wall Street Journal (12/22),  The Wall Street Journal (1/13) 
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The Federal Trade Commission's updated rule on how nonbank financial institutions must safeguard consumer information expands requirements, as well as the definition of which entities are subject to the rule. The regulation requires information security programs that address "access controls, data inventory and classification, encryption, secure development practices, authentication, information disposal procedures, change management, testing, and incident response."
Full Story: Bloomberg Law (1/11) 
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The resignation of Federal Deposit Insurance Corp. Chair Jelena McWilliams, the only Republican on the board, might trigger increased regulation of issues including bank mergers and acquisitions, cryptocurrencies and climate change disclosure, analysts say.
Full Story: BNN Bloomberg (Canada) (1/4),  The Wall Street Journal (1/2) 
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NEW! Foundation & Deloitte Research Report
This groundbreaking report summarizes the global state of internal audit competency. It details where internal auditors across all levels, around the world, assessed their level of competency compared to The IIA's Internal Audit Competency Framework. It identifies areas where gaps exist in competency and relevance to the auditor's position, as well as perception of their ability to audit key digital technologies. Download this must-read, maximizing report.
Fraud & Ethics
Cryptocurrency-related crime rose 79% worldwide in 2021 compared with 2020, with cryptocurrency theft jumping 516% and losses totaling a record $14 billion, according to Chainalysis. A large portion of the losses is tied to decentralized finance, which Chainalysis says "is unlikely to realize its full potential if the same decentralization that makes it so dynamic also allows for widespread scamming and theft."
Full Story: CNBC (1/7) 
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NEW! Fraud Virtual Conference Registration Open
Join keynote presenter, Kelly Paxton, CFE, licensed PI, and workplace dishonesty and pink collar crime expert at the first annual Virtual Fraud Conference, Feb. 22. Earn 6.5 CPEs as you think pink. Register now.
The carbon footprint of bitcoin jumped 25% in 2020, rising in tandem with its price, according to research from De Nederlandsche Bank. The Dutch central bank's study found that the "increase in the environmental cost per transaction can be attributed to a sharp increase in the overall energy consumption of the bitcoin network."
Full Story: FX News Group (1/14),  Risk (subscription required) (1/17) 
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NEW! IIA IT General Controls Certificate
Enhance your specialized knowledge and showcase your expertise in 12 key technology areas by completing The IIA's IT General Controls Certificate Program. Passing the exam at the end of the program demonstrates your competency and distinguishes you from your peers.
Learn more about this self-study program.
IIA News
New remote workforce report
A new report, "The Remote Auditor: Challenges, Opportunities, and New Ways of Working," by the Internal Audit Foundation and AuditBoard, examines how the adoption of technology solutions is critical for addressing the remaining remote audit challenges. Learn four key takeaways on how to sustain a positive workplace culture in a virtual setting. Read the report to identify new strategies to meet the new realities.
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Did you miss the CPE deadline? Next steps
If you did not report your 2021 CPE credit hours by Dec. 31 as required to maintain your IIA certification, your certification status may now be in a grace period or expired. Take a moment to report your CPE as soon as possible so that your certification may once again be active. Learn more about CPE requirements and reinstating your certification.
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COVID-19 Resource Exchange
The IIA Announces New Members-only Benefits
The IIA has introduced new tools of the trade that enhance the value of the profession and the professional, at every level, everywhere. From relevant research and resources to the practical tips, templates, and how to's you've been seeking - there's never been a better time to discover more benefits of membership. Learn more.
In January it's so nice While slipping on the sliding ice To sip hot chicken soup with rice ...
Maurice Sendak,
illustrator, writer
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About the IIA Financial Services Audit Center (FSAC)
FSAC is an IIA specialty center for audit professionals in the banking, asset management, and insurance sectors. FSAC advances the professional practice of auditing in the financial services industry through thought leadership, education and training events, professional guidance, and advocacy. Learn more about FSAC and how you can add the center to your IIA membership.
IIA Resources
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