Update on Consumer Financial
Protection Bureau Matter
As previously reported, on February 12, 2020, MoneyGram
International, Inc. (the “Company”) received a Report of
Examination (“ROE”) from the Consumer Financial Protection Bureau
(“CFPB”) stating that previous findings from a 2019 exam were not
remediated, and the matter would be referred to its Enforcement
Unit. On March 18, 2020, the Company received a Civil
Investigative Demand (“CID”) from the CFPB’s Enforcement Unit. On
June 11, 2020, the Company provided a timely response to the
ROE describing the remedial actions taken and that the findings
have been substantially remediated. On August 21, 2020, the
Company completed its production in response to the CID. On
February 25, 2021, the CFPB provided the Company with a Notice
and Opportunity to Respond and Advise (“NORA”) letter, documenting
the CFPB’s intent to take legal action against the Company based on
four alleged violations under the Remittance Rule, the Electronic
Fund Transfer Act (the “EFTA”) and the Consumer Financial
Protection Act (the “CFPA”). The Company provided the CFPB with its
written response to the NORA letter on March 17, 2021. Over
the past several months, the Company and the CFPB engaged in
negotiations regarding a potential settlement agreement but were
ultimately unable to reach an agreed resolution on this matter.
On April 21, 2022, the CFPB and the New York State Office of
the Attorney General filed a complaint (the “Complaint”) in the
United States District Court for the Southern District of New York
against the Company and MoneyGram Payment Systems, Inc., a wholly
owned subsidiary of the Company. The Complaint alleges seven counts
of violations under the Remittance Rule, the CFPA, the EFTA and New
York Executive Law § 63(12), and seeks injunctive relief,
restitution, unspecified damages, civil money penalties and costs.
The Company believes the case is without merit and intends to
vigorously defend this matter.
Update on Merger
Timeline
As previously disclosed, on February 14, 2022, the Company
entered into an Agreement and Plan of Merger by and among the
Company, Mobius Parent Corp., a Delaware corporation (“Parent”) and
an affiliate of Madison Dearborn Partners, LLC (“Madison
Dearborn”), and Mobius Merger Sub, Inc., a Delaware corporation and
wholly owned subsidiary of Parent. The Company and Madison Dearborn
continue to work together to complete closing conditions and the
Company continues to anticipate closing the transaction in the
fourth quarter of 2022.
Forward Looking Statements
This Current Report on Form 8-K contains forward-looking statements
which are protected as forward-looking statements under the Private
Securities Litigation Reform Act of 1995 that are not limited to
historical facts, but reflect the Company’s current beliefs,
expectations or intentions regarding future events and speak only
as of the date they are made. Words such as “may,” “might,” “will,”
“could,” “should,” “would,” “expect,” “plan,” “project,” “intend,”
“anticipate,” “believe,” “estimate,” “predict,” “potential,”
“pursuant,” “target,” “forecast,” “outlook,” “continue,”
“currently,” and similar expressions are intended to identify such
forward-looking statements. The statements in this communication
that are not historical statements are forward-looking statements
within the meaning of the federal securities laws. Specific
forward-looking statements include, among others, statements
regarding the expected timetable for completing the proposed
transaction. Forward-looking statements are subject to numerous
risks and uncertainties that are difficult to predict and many of
which are beyond the Company’s control, which could cause actual
results to differ materially from the results expressed or implied
by the statements. These risks and uncertainties include, but are
not limited to: the failure to obtain the required votes of the
Company’s stockholders; the timing to consummate the proposed
transaction; the satisfaction of the conditions to closing of the
proposed transaction or the debt financing may not be satisfied or
that the closing of the proposed transaction otherwise does not
occur; the risk that a regulatory approval, including the receipt
of money transmitter license approvals, that may be required to
consummate the proposed transaction is not obtained or is obtained
subject to conditions that are not anticipated or conditions that
Parent is not obligated to accept; the diversion of management time
on transaction-related issues; expectations regarding regulatory
approval of the transaction; results of litigation, settlements and
investigations; actions by third parties, including governmental
agencies; changes in economic, business, competitive, technological
and/or regulatory factors, or catastrophic events, including acts
of terrorism, outbreak of war or hostilities (including the ongoing
conflict in Ukraine), civil unrest, adverse climate or weather
events and the COVID-19 pandemic or
other public health emergencies; adverse industry conditions;
adverse credit and equity market conditions; the loss of, or
reduction in business with, key customers; legal proceedings; the
ability to effectively identify and enter new markets; governmental
regulation; the ability to retain management and other personnel;
and other economic, business, or competitive factors.
Additional information concerning factors that could cause actual
results to differ materially from those in the forward-looking
statements is contained from time to time in the Company’s filings
with the SEC. The Company’s SEC filings may be obtained by
contacting the Company, through the Company’s web site at
ir.moneygram.com or through the SEC’s Electronic Data Gathering and
Analysis Retrieval System at www.sec.gov. The Company undertakes no
obligation to publicly update or revise any forward-looking
statement.
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