UK’s FSA fines a firm and its MLRO for failing Money Laundering procedures
Friday, November 7th, 2008On October 29, 2008, the UK’s independent non-governmental body Financial Services Authority (FSA) announced that the same day it fined Sindicatum Holdings Limited (SHL) GBP 49 000.
The FSA also fined SHL’s money laundering reporting officer (MLRO), Michael Wheelhouse, GBP 17 500 as he did not have appropriate anti-money laundering systems and controls in place that would verify and record the identities of the customers. It should be noted that this was the 1st time the FSA has imposed a fine on a money laundering reporting officer.
A number of failings was detected by the FSA. The failings included the following:
- SHL failed to implement adequate procedures aimed to verify its customers’ identities;
- SHL failed to verify adequately the identities of a significant number of its customers;
- SHL failed to keep adequate records of the verification of its customers’ identities;
- SHL’s MLRO, Michael Wheelhouse, failed to take reasonable steps to implement adequate procedures for controlling risk of money laundering.
Head of retail enforcement at the FSA, William Amos, said that it is crucial to the integrity of the United Kingdom’s financial markets to ensure that regulated firms are not used by criminals for money laundering. He also said that senior management must implement and follow procedures that meet the requirements made by the FSA. According to Amos, this fine is a warning to firms and individuals about the importance to comply with the FSA’s rules and the Authority “will not hesitate to clamp down on failures, where necessary”.
When deciding on the amount of the fine for Sindicatum Holdings Limited, the FSA took into consideration the limited financial resources of the firm as well as its ability to pay the penalty. Otherwise the penalty is said to have been significantly larger.