Western Union 2014 Annual Report Download - page 249

2014 FORM 10-K
THE WESTERN UNION COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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On March 6, 2014, the Company was served with a federal grand jury subpoena issued by the United States Attorney’s Office
for the Southern District of Florida (“USAO-SDFL”) seeking a variety of AML compliance materials, including documents relating
to the Company’s AML, Bank Secrecy Act (“BSA”), Suspicious Activity Report (“SAR”) and Currency Transaction Report
procedures, transaction monitoring protocols, BSA and AML training programs and publications, AML compliance investigation
reports, compliance-related agent termination files, SARs, BSA audits, BSA and AML-related management reports and AML
compliance staffing levels. The subpoena also calls for Board meeting minutes and organization charts. The period covered by the
subpoena is January 1, 2007 to November 27, 2013. The Company has received additional subpoenas from the USAO-SDFL and
the Broward County, Florida Sheriff’s Office relating to the investigation, including a federal grand jury subpoena issued by the
USAO-SDFL on March 14, 2014, seeking information about 33 agent locations in Costa Rica such as ownership and operating
agreements, SARs and AML compliance and BSA filings for the period January 1, 2008 to November 27, 2013. Subsequently,
the USAO-SDFL served the Company with seizure warrants requiring the Company to seize all money transfers sent from the
United States to two agent locations located in Costa Rica for a 10-day period beginning in late March 2014. On July 8, 2014, the
government served a grand jury subpoena calling for records relating to transactions sent from the United States to Nicaragua and
Panama between September 1, 2013 and October 31, 2013. The government has also notified the Company that it is a target of
the investigation. The investigation is ongoing and the Company may receive additional requests for information or seizure warrants
as part of the investigation. The Company is cooperating fully with the government. The Company is unable to predict the outcome
of the government's investigation, or the possible loss or range of loss, if any, which could be associated with the resolution of any
possible criminal charges or civil claims that may be brought against the Company. Should such charges or claims be brought, the
Company could face significant fines, damage awards or regulatory consequences which could have a material adverse effect on
the Company's business, financial condition and results of operations.
Shareholder Action and Other Matters
On December 10, 2013, City of Taylor Police and Fire Retirement System filed a purported class action complaint in the
United States District Court for the District of Colorado against The Western Union Company, its President and Chief Executive
Officer and a former executive officer of the Company, asserting claims under sections 10(b) and 20(a) of the Securities Exchange
Act of 1934 (“Exchange Act”) and Securities and Exchange Commission rule 10b-5 against all defendants. On September 26,
2014, the Court appointed SEB Asset Management S.A. and SEB Investment Management AB as lead plaintiffs. On October 27,
2014, lead plaintiffs filed a consolidated amended class action complaint, which asserts the same claims as the original complaint,
except that it brings the claims under section 20(a) of the Exchange Act only against the individual defendants. The consolidated
amended complaint also adds as a defendant another former executive officer of the Company. The consolidated amended complaint
alleges that, during the purported class period, February 7, 2012 through October 30, 2012, defendants made false or misleading
statements or failed to disclose adverse material facts known to them, including those regarding: (1) the competitive advantage
the Company derived from its compliance program; (2) the Company’s ability to increase market share, make limited price
adjustments and withstand competitive pressures; (3) the effect of compliance measures under the Southwest Border Agreement
on agent retention and business in Mexico; and (4) the Company’s progress in implementing an anti-money laundering program
for the Southwest Border Area. On December 11, 2014, the defendants filed a motion to dismiss the consolidated amended complaint.
On January 5, 2015, plaintiffs filed an opposition to defendants’ motion to dismiss the consolidated amended complaint. On January
23, 2015, defendants filed a reply brief in support of their motion to dismiss the consolidated amended complaint. This action is
in a preliminary stage and the Company is unable to predict the outcome, or the possible loss or range of loss, if any, which could
be associated with this action. The Company and the named individuals intend to vigorously defend themselves in this matter.