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Inside Compliance (Aug 19th, 2019)

1. The Internal Revenue Service is gearing up to take on taxpayers who don't report their cryptocurrency earnings. The IRS estimates that more than 10,000 people haven't complied with tax laws related to cryptocurrencies and the agency is expected to hand out criminal indictments soon. But cryptocurrency advocates argue that the IRS hasn't offered sufficient guidance to owners of virtual currency. “The scary IRS letters tell people to ‘accurately’ or ‘properly’ report their transactions, but what’s that? Maybe they would have filed if they had clear answers and hadn’t felt overwhelmed,” said James Foust, a research fellow with Coin Center. - WALL STREET JOURNAL

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2. PG&E's court-appointed compliance officer told a U.S. District Judge that the utility company is not doing enough to mitigate wildfire threats in California. Compliance monitor Mark Filip wrote U.S. Judge William Falup that his inspections are "not only revealing individual trees that are missed, including three active wildfire threats in high-risk areas, but they also reflect gaps in processes, for example, contractor training." PG&E's negligence was found responsible for causing numerous California fires, including the one last year that burned down Paradise and killed 85 people. - BLOOMBERG

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3. The Trump administration has appointed a student loan industry executive to serve as the Consumer Protection Bureau's new student loan ombudsman. The ombudsman, a position that came into existence after the 2008 financial crisis with the Dodd-Frank Act, is tasked with being the watchdog for the $1.5 trillion student loan market. Robert Cameron, the appointee, was the head of compliance and risk mitigation for the Pennsylvania Higher Education Assistance Agency, also known as FedLoan Servicing, which has been criticized for poor industry practices. The president has previously been criticized for his own now-shuttered Trump University, which settled for $25 million with students who claimed they were duped into enrolling in the "sham" institution. - ASSOCIATED PRESS

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4. The tobacco industry's court-ordered anti-smoking advertisements only reached 40 percent of adults and 50 percent of smokers, shirking compliance with a Justice Department ruling. The findings from an academic study led by a University of Texas genetic epidemiologist comes a decade after a U.S. District Judge ordered the tobacco industry to sponsor anti-smoking advertising in a wide array of mediums. "The tobacco industry has been several steps ahead of regulation since the first Surgeon General’s report showing that smoking is responsible for large-scale death of its users,” said Yale University neuroscientist Marina Picciotto. “Compliance with a court-ordered advertising campaign could be designed with an eye to keeping the message away from the eyes of their most valuable consumers.” - REUTERS

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5. The European Central Bank announced it has been hit by a malware hacking attack, compromising the security of personal data. The hack took place in December, Reuters reported. It targeted the ECB's Banks' Integrated Reporting Dictionary website. "The BIRD website provides the banking industry with details on how to produce statistical and supervisory reports," said an ECB statement. "it is physically separate from any other external and internal ECB systems. The ECB has shut down the BIRD site until further notice. - FORBES

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6. Britain's National Health Service has received a $9.7 million payout from the pharmaceutical firm Aspen, which was found to have engaged in price gouging on a life-saving drug. The drug, fludrocortisone, is used to treat Addison's disease. An investigation by the Competition and Markets Authority found that Aspen had paid two rival firms to stay out of the market. Aspen admitted to the charges. “The £8m Aspen has agreed to provide will save the NHS the time and expense of seeking damages in court,” said Coscelli. “Importantly, Aspen has also committed to ensuring there are more competitors in this market, giving the NHS the opportunity to secure better value for UK taxpayers’ money in the future.” - GUARDIAN

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7. The U.S. government has collected more than $200 million from defense contractors in the last decade since it became mandatory to self-report fraud, according to a new report from the inspector general. A Bloomberg article highlights one representative incident in which Sierra Nevada Corp. -- the aerospace contractor, not the famous brewery of the same name -- disclosed Pentagon overpayments and paid a $14.7 million settlement. In the wake of the settlement, Sierra Nevada said it “implemented rigorous and comprehensive accounting processes, and added additional training and tools designed to ensure adherence to the highest standards of compliance with regulations.” - BLOOMBERG

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8. Islamic terrorist groups are turning to cryptocurrency to evade the net of global law enforcement. “You are going to see more of this,” said Yaya Fanusie, a former Central Intelligence Agency analyst. “This is going to be a part of the terrorist financing mix, and it is something that people should pay attention to.” While the compliance regulations observed by global financial institutions make it difficult for unsavory actors to remain anonymous, it's easy to create an anonymous Bitcoin profile and send and receive money. “I think we are still in the experimentation phase for terrorist groups -- they are trying to figure out how best to do this,” said Coinbase advisor Juan Zarate. - NEW YORK TIMES

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9. UCLA's David Geffen School of Medicine seeks a controls and compliance specialist in the dean's office. The position will oversee the school's distributed administrative security system. Candidates should have graduated college with a finance or accounting major and have at least two years of experience.

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10. Vanguard seeks a chief compliance officer for its Vanguard Marketing Corporation to support its growing retail investor business. The officer will oversee other compliance professionals covering brokerage activities. The officer will also be tasked with advertising and marketing compliance.

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Paul Wachter is a California-based journalist who has written for The New York Times Magazine, Harper's, ESPN, and other publications. 

Editor: David Stegon (senior editor at Inside, whose reporting experience includes cryptocurrency and technology).

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