Federal prosecutors are investigating Block, the company founded by Jack Dorsey. A former employee claims Block has had major, long-standing issues with compliance, including failing to properly screen customers, process sanctioned transactions, and report suspicious activity as required by law.
These lapses have been identified by an outside consultant and were allegedly known to the company's leadership and board of directors. Block maintains it is committed to improving compliance but has disputed the severity of the allegations.
Block reported strong Q4 earnings, surpassing estimates with $5.77 billion in revenue and 22% growth in gross profit. Both its Square and Cash App divisions performed well, with Cash App's gross profit increasing by 25% and monthly active users reaching 56 million. Despite cost-cutting measures, Block faced challenges with its Afterpay acquisition. Wall Street responded positively, upgrading ratings and raising price targets for the company.
