MONTH-IN-BRIEF (Jan 2021)
MoneyGram Ducks Caremark Claim Despite “Feckless Oversight” of Wire Transfer Operations
By Sara F. Kirkpatrick, K&L Gates
Recently, in Richardson v. Clark, the Delaware Court of Chancery dismissed fiduciary duty claims brought under a Caremark theory of liability, arising from MoneyGram International’s alleged failure to comply with federal anti-money-laundering (AML) requirements, resulting in MoneyGram paying total fines of $225 million. In 2012, MoneyGram entered into a deferred prosecution agreement with federal prosecutors (DPA), made a $100 million restitution payment and implemented measures to prevent future wire fraud and money laundering, including by: (i) creating an internal compliance and ethics committee responsible for ensuring DPA compliance, as well as hiring an independent compliance monitor, (ii) implementing worldwide policies designed to ensure compliance with AML standards, and (iii) dis-incentivizing executives from contributing to compliance failures. The DPA was extended to 2021 due to continued alleged violations of AML laws, and MoneyGram payed an additional $125 million in restitution.