Block shares fall on reports of US probe
Make us a preferred source
Make us a preferred source on Google
The news: Block shares have tumbled on the ASX after NBC reported that US federal prosecutors were digging into the fintech over alleged compliance breaches.
The numbers: Block's ASX share price fell nearly 6% in early trading on Thursday after closing 8.44% lower overnight on the New York Stock Exchange.
Separately, a new corporate filing issued on Thursday showed Cash App general manager Brian Grassadonia sold USD7.6 million ($11.64 million) worth of Block shares on Wednesday.
The disclosure also showed Grassadonia sold additional stakes collectively worth around USD27 million in the previous three months.
The context: According to NBC, a former employee provided around 100 pages of documents that showed the company collected insufficient information on Square and Cash App customers to properly assess risks.
This, they claim, facilitated payments to sanctioned countries and processing crypto transactions for terrorist groups.
In March last year, a short seller report issued by Hindenburg Research claimed Block had facilitated fraud against its users and the US government. Block denied the extensive claims as "factually inaccurate" at the time.
What they said: “Block has a responsible and extensive compliance program and we regularly adapt our practices to meet emerging threats and an evolving sanctions regulatory environment," a Block spokeswoman said.
"Our compliance program includes systems, tools, and processes for sanctions screening, as well as investigating and reporting on sanctions issues in accordance with our regulatory obligations.
Continually improving the safety and security of our ecosystem is a top priority for Block. We have been and remain committed to building upon this work, as well as continuing to invest significantly in our compliance program.”
