Types of adverse media
Adverse media refers to negative news or information about individuals, entities, or organizations that may pose a risk due to involvement in illegal, unethical, or high-risk activities. Adverse media screening is a crucial component of anti-money laundering (AML) and risk management processes. The types of adverse media can vary, but they generally fall into several categories:
- Legal Issues:
- News related to criminal charges, convictions, or legal proceedings against an individual or organization.
- Financial Distress:
- Information about financial troubles, bankruptcy filings, or economic instability that could indicate financial risk.
- Regulatory Violations:
- Reports of violations of laws, regulations, or industry standards. This may include regulatory fines, penalties, or sanctions.
- Fraud and Scams:
- News related to fraudulent activities, scams, or schemes involving the individual or organization.
- Corruption and Bribery:
- Reports of involvement in corrupt practices, bribery, or other unethical conduct.
- Terrorism and Extremism:
- Information linking an individual or organization to terrorism, extremist activities, or associations with known terrorist groups.
- Sanctions and Embargoes:
- News indicating a connection to entities, countries, or individuals subject to economic sanctions or embargoes.
- Environmental Violations:
- Reports of violations related to environmental laws, pollution, or other environmental concerns.
- Labor Practices:
- News about unethical labor practices, such as exploitation, child labor, or poor working conditions.
- Ethical Concerns:
- Reports highlighting ethical concerns, conflicts of interest, or other issues that could impact an individual's or organization's reputation.
- Cybersecurity Incidents:
- News related to data breaches, cyberattacks, or security incidents that may indicate vulnerabilities or risks.
- Health and Safety Violations:
- Reports of violations related to health and safety regulations, product safety, or public health concerns.
- Litigation:
- News about involvement in lawsuits, legal disputes, or litigious activities.
- Negative Publicity:
- General negative publicity, criticism, or controversy surrounding an individual, entity, or organization.
The scope and sources of adverse media can vary, and organizations may use automated tools, databases, and manual reviews to conduct comprehensive adverse media screening. The goal is to identify and assess potential risks associated with clients, customers, or counterparties to make informed decisions and mitigate risks related to financial crime and compliance.
