May 1 (Reuters) - U.S. prosecutors are examining

financial transactions at Block, NBC News reported on

Wednesday, citing two people with direct knowledge of the

matter.

NBC reported that federal prosecutors were discussing with a

former employee alleged widespread compliance lapses at Square

and Cash App, the company's two main units.

Areas under investigation include whether the company failed

to gather sufficient information on customers to assess risks,

if Square processed transactions involving countries subject to

economic sanctions and if Block handled cryptocurrency

transactions for terrorist groups.

Spokespeople for Block, whose shares fell more than 7% in

early trading, did not immediately respond to a Reuters request

for comment, but told NBC that the company has a "responsible

and extensive compliance program," and that it is committed to

continually improving it.

A spokesperson for the Southern District of New York

declined to comment.

The former employee said the company did not address

breaches when alerted, and most of the transactions being

examined were not reported to the government as required, NBC

reported.

Some of the transactions involved sanctioned countries like

Cuba, Iran, Russia and Venezuela and are as recent as last year.