February 20, 2018

It singled out the bank’s relationship with Scott Tucker, a former race car driver sentenced earlier this year to more than 16 years in prison for running a fraudulent payday lending operation.

The U.S. Justice Department said Minneapolis-based U.S. Bancorp “willfully” failed to maintain adequate safeguards against money laundering, leading the bank to miss suspicious transactions for a five-year period from 2009 to 2014.

WASHINGTON — U.S. Bancorp has agreed to pay the federal government $613 million to settle criminal charges that it did not guard against money laundering in its business.

February 20, 2018
Star Tribune

Fraud in virtue or compliance is still fraud, and it can lead to reputational damage if stakeholders interpret the act as being willfull.

Reputation risk: peril of stakeholders’ disappointment and anger.

Reputations are valuable strategic intangible assets. Threats to these assets⏤ enterprise reputation risks, often mislabeled “brand risks” ⏤ need to be managed, and management needs to be overseen through reputation risk governance lest reputational damage or reputational harm result in long-tailed go-forward losses in economic value and/or political power. Because these intangible risks arise from the interplay of stakeholder expectation, experiences, and media amplification, parametric insurances for intangible asset risks, for reputational value, for reputational harm, and for reputation assurance help mitigate risk by telling a simple, convincing and completely credible story of quality reputation governance to stakeholders. This story telling effect is the expressive power of insurance complementing insurance’s better known instrumental power of indemnification.

Risk management, risk financing in insurance captives, and risk transfer through reputation insurances comprise the constituent elements of a comprehensive solution. What’s your strategy?