July 01, 2019

Investors suing MoneyGram over a $125 million fine urged an Illinois federal court Monday not to throw out their proposed securities class action accusing the money transfer company of lying about its anti-fraud compliance, saying the company's argument that its misconduct reflected software kinks doesn’t hold water.

Pushing back on Texas-based MoneyGram’s claims that they should have known the risk that its anti-fraud and anti-money laundering compliance programs might not meet the expectations of government regulators, investors said Monday that those assertions go against both the federal government’s findings and the money-moving giant’s own admissions to the U.S. Department of Justice.

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The lawsuit claims that MoneyGram's rosy assurances about its anti-fraud and anti-money laundering compliance were belied by the $125 million fine, which settled claims that the company violated a five-year deferred prosecution agreement with the DOJ in 2012 as well as a 2009 order from the Federal Trade Commission.

A day after the $125 million deal was announced in November 2018, shares of MoneyGram fell $2.20, or more than 49%, according to the investors, who claim the company is liable for lying about its compliance.

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The investors are represented by Julie Reiser, Eric S. Berelovich, Molly J. Bowen and Carol V. Gilden of Cohen Milstein Sellers & Toll PLLC, Shannon Hopkins of Levi & Korsinsky LLP and Anthony Fata of Cafferty Clobes Meriwether & Sprengel LLP.

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