May 1, 2024 at 08:40PM
US prosecutors are reportedly investigating fintech company Block over compliance issues related to its Square and Cash App services. A former employee allegedly provided documents detailing lax compliance checks, including approval of merchant accounts without due diligence and difficulties in monitoring transactions for US law compliance. The company claims to have an extensive compliance program.
Based on the meeting notes, the key takeaways are:
1. Fintech company Block, led by former Twitter CEO Jack Dorsey, is reportedly under investigation by US prosecutors over lax compliance checks in its Square and Cash App services.
2. A former employee leaked around 100 documents detailing compliance failings to prosecutors in the Southern District of New York.
3. The documents include details of a report by outside consultants, finding almost 50 compliance issues that need fixing.
4. Block claims to have a responsible and extensive compliance program, including systems and processes for sanctions screening, but the former worker alleges that there were significant compliance flaws.
5. Allegations include improper due diligence on merchant accounts and difficulties in checking if transactions are compliant with US laws in the Cash App, potentially allowing illegal transactions and involving terrorist groups.
6. Block’s stock price fell over eight percent when news of the legal action broke.
7. Prosecutors are yet to comment on the matter.
It is important to stay updated on the developments of this investigation and any official statements from Block or the prosecutors.