MoneyGram 2011 Annual Report Download - page 28

Table of Contents
in her complaint that she is a stockholder of the Company and asserts, among other things, (i) breach of fiduciary duty claims against the Company’s
directors, THL and Goldman Sachs and (ii) claims for aiding and abetting breach of fiduciary duties against Goldman Sachs. Ms. Kramer purports to sue on
her own behalf and on behalf of the Company and its stockholders. Ms. Kramer sought to, among other things, enjoin the 2011 Recapitalization. The
defendants have moved for the Texas court to stay this litigation in favor of the Pittman litigation in Delaware, which has an overlapping class definition.
Other Matters — The Company is involved in various claims and litigation that arise from time to time in the ordinary course of the Company’s business.
Management does not believe that after final disposition any of these matters is likely to have a material adverse impact on the Company’s financial
condition, results of operations and cash flows.
Government Investigations:
MoneyGram has been served with subpoenas to produce documents and testify before a grand jury in the U.S. District Court for the Middle District of
Pennsylvania. The subpoenas sought information related to, inter alia, MoneyGram’s U.S. and Canadian agents, as well as certain transactions involving
such agents, fraud complaint data, and MoneyGram’s consumer anti−fraud program during the period from 2004 to 2009. MoneyGram has provided
information requested pursuant to the subpoenas and continues to provide additional information relating to the investigation. In addition, the Company has
been provided with subpoenas for the testimony of certain current and former employees in connection with the investigation. The Company has also been
notified of a request for interviews of one current executive officer and one former chief executive officer of the Company. The U.S. Department of the
Treasury Financial Crimes Enforcement Network, or FinCEN, also requested information, which information was subsequently provided by MoneyGram,
concerning MoneyGram’s reporting of fraudulent transactions during this period. In November 2010, MoneyGram met with representatives from the U.S.
Attorney’s Office for the Middle District of Pennsylvania, or the MDPA USAO, and representatives of FinCEN to discuss the investigation. In July 2011,
MoneyGram had further discussions with the MDPA USAO and representatives of the Asset Forfeiture and Money Laundering Section of the U.S.
Department of Justice, or the US DOJ. MoneyGram has been informed that it is being investigated by the federal grand jury in connection with these
matters for the period 2004 to early 2009 as well as MoneyGram’s anti−money laundering program during that period. In January 2012, meetings were held
between representatives of the Company, the MDPA USAO and the Criminal Division of the US DOJ to discuss the investigation. MoneyGram continues to
engage in discussions and cooperate with such government representatives regarding the ongoing investigation. During the course of these discussions, the
Company was advised that consideration is being given to a range of possible outcomes, including the seeking of criminal penalties against the Company.
However, no conclusions can be drawn at this time as to the outcome of the investigation, and we are unable to predict the probable loss, or range of loss, if
any, associated with this matter.
MoneyGram has also received Civil Investigative Demands from a working group of nine state attorneys general who have initiated an investigation into
whether the Company has taken adequate steps to prevent consumer fraud during the period from 2007 to 2011. The Civil Investigative Demands seek
information and documents relating to the Company’s procedures to prevent fraudulent transfers and consumer complaint information. MoneyGram
continues to cooperate fully with the states in this matter. MoneyGram has submitted the information and documents requested by the states. No claims have
been made against MoneyGram at this time.
Other Matters — The Company is involved in various government inquiries and other matters that arise from time to time. Management does not believe
that after final disposition any of these matters is likely to have a material adverse impact on the Company’s financial condition, results of operations and
cash flows.
Item 4. MINE SAFETY DISCLOSURES
Not applicable.
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