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Bank fined after credit limits were breached

Private bank Leopold Joseph & Sons has been fined £85,000 by the FSA for serious failings in monitoring credit limits.

The bank, based in London and Guernsey, failed to undertake improvements to its credit limit monitoring systems after an FSA visit in 1999, which led to a client&#39s credit limit for foreign exchange transactions being exceeded by more than five times.

This breach of credit limits, which was dealt with by senior management over a three-year period, exposed other clients of Leopold Joseph & Sons to the risk of loss of their deposits.

The bank is an authorised deposit-taker with 2,000 depositors and also carries on investment business.

FSA director of enforcement Andrew Procter says: “A firm&#39s senior management must ensure appropriate systems and controls are in place to allow it to monitor the risks that the firm is exposed to. LJS&#39s failure over a three-year period to rectify this weakness, despite senior management being made aware of the issue by both the FSA and its internal auditors, exposed the firm to an increased risk of unexpected losses.”

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