As The D&O Diary has emphasized in numerous posts in recent months (most recently here), geopolitical issues represent an increasing source of D&O risk. The geopolitical issues include, among other things, sanctions, tariffs, and export controls. Another geopolitical issue that can have an impact on D&O risk is the enforcement of anti-money laundering (AML) laws. In the latest example of AML enforcement translating into D&O risk, in late July a plaintiff shareholder filed a securities class action lawsuit against British money transfer technology company Wise Group, a company whose U.S. bank charter application was denied due to AML concerns. A copy of the July 31, 2026, complaint can be found here.
Background
Wise Group is a U.K.-based technology company concentrating on cross-border money and currency transfers. On May 11, 2026, Wise’s ordinary shares transferred to Nasdaq from the London Stock Exchange. The company said it made the move to the U.S. market as part of an effort to try to target the U.S. for its money transfer business. The company also expressed its intent to seek a U.S. bank charter.
The subsequently filed securities lawsuit complaint alleges that at the time the company made its U.S. move, it “materially understated the regulatory risk facing the Company, given that it was under active investigation by Belgian authorities.” The Company also “materially understated the chance that Wise would not receive a national bank charter from the Office of the Comptroller of the Currency … in the U.S. as a result of ‘longstanding,’ material and pervasive concerns with Wise’s anti-money laundering …protocols, and inadequate efforts to prevent terrorist financing, which were either known to Defendants or should have been known to Defendants.”
On June 1, 2026, Reuters published an article reporting that the value of the company’s shares had declined on news of a Belgian money-laundering investigation, reportedly involving more than half a billion euros ($582.5 million) in suspicious transactions. The Reuters article reported that the investigation “began last year and is nearing completion, concerns potential money laundering offences, with alleged links to fraud, corruption, and drug trafficking.” The story also noted allegations that the company’s services were “used by international criminal organizations.” The complaint alleges that the company’s shares fell on this news.
On July 24, 2025, the Wall Street Journal published an article reporting that the U.S. banking regulator had denied the company’s application for a banking charter “citing long-standing deficiencies in anti-money laundering and countering of the financing of terrorism.” The company ‘s share price fell further on this news.
The Lawsuit
The complaint alleges that the defendants made false or misleading statements or failed to disclose that: “(1) in order to have a successful debut on the NASDAQ, Defendants materially understated Wise’s regulatory risk as a result of its materially deficient anti-money laundering efforts, as well as insufficient efforts to prevent the financing of terrorism; and (2) as a result, Defendants’ statements about Wise’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.”
The complaint alleges that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint seeks to recover damages on behalf of the class.
Discussion
Although the focus of the complaint is Wise company’s alleged violation of anti-money laundering laws, the underlying allegations in fact relate to host of alleged violations of various cross-border laws and enforcement regimes, including those involving corruption and terrorism. The underlying allegations embody a series of cross-border concerns, all of which are magnified in the current fraught geopolitical environment.
While the current circumstances are an important element of the seriousness of the concerns involving the Wise company, it should also be noted that it is not necessarily a new development that alleged AML law violations can lead to D&O claims activity. For example, in January 2025, the money transfer company Block was hit with a securities suit based on allegations that the company’s failure to maintain AML protocols had created a “haven for criminal and illicit activities.” In our blog post (here) about the Block lawsuit, we linked to numerous prior securities suits filed based on underlying AML, export controls, or trade sanctions violations.
In light of the prior lawsuit filings, it could be argued that the issues underlying this complaint are not new. However, I believe that in the current geopolitical environment, these issues are even more complicated than in the past.
Geopolitical issues arising from the war in Ukraine and the conflict in Iran; the strains arising from the closure of the Strait of Hormuz; the trade war raging based on U.S. tariffs and other countries’ countermeasures; and tensions arising from cross-border migration, among many other things, make for an unpredictable and potentially changeable global business environment.
As we have noted in our recent posts discussing geopolitical issues and their impact on the D&O arena, the geopolitical issues are becoming an increasingly important source of D&O risk and increasingly are translating into D&O claims. The geopolitical issues increasingly are impacting companies’ operating circumstances and financial results, as well as companies’ share prices, creating an environment in which D&O claims are increasingly likely to emerge.
It is worth noting that this company had been a U.S.-listed company for only about three months when it was hit with this securities class action lawsuit. (Indeed, the first day of the proposed class period is in fact the day the company’s shares began trading in the U.S.) If nothing else, this sequence of events shows the heightened litigation exposure for companies whose shares are listed on U.S. exchanges.