View more on these topics

FCA fines private bank £4.2.m for anti-money laundering failures

FCA logo original size

The Financial Conduct Authority has fined EFG Private Bank £4.2m for serious failures in its anti-money laundering controls.

EFG is the UK private banking subsidiary of Switzerland-based global private banking group EFGI Group. It provides private banking and wealth management services to high-net-worth individuals, including some from overseas jurisdictions recognised as presenting a higher risk of money laundering, bribery and corruption.

Between December 2007 and January 2011, 59 per cent of EFG’s customers were from overseas, including some from jurisdictions which did not have anti-money laundering requirements equivalent to the UK or were identified as having a greater level of corruption.

At the end of 2011, around 400 of EFG’s 3,342 customer accounts were deemed by the firm to present a higher risk of money laundering or reputational risk.

An FSA investigation found 17 of 36 reviewed EFG customer files showed significant money laundering risks but there were insufficient records of how those risks had been mitigated.

Of the 17 files, 13 related to criminal allegations or charges.

In one account, EFG’s due diligence found a prospective client had acquired their wealth through their father, who was alleged to have links with organised crime, money laundering and murder. There was inadequate information on file to explain how the bank concluded this risk was acceptable.

FCA head of enforcement and financial crime Tracey McDermott says: “While EFG’s policies looked good on paper, in practice it manifestly failed to ensure it was addressing its anti-money laundering risks.”

Evolve Financial Planning director Jason Witcombe says: “Firms have a big responsibility to act as a gatekeeper to UK financial services. Sometimes sophisticated ways of laundering money will fly under the radar but sometimes suspicions will be staring you in the face.”

Recommended

Advisers upset to see Aviva axe direct advice arm

Advisers are disappointed Aviva has become the latest high-profile brand to stop offering face-to-face advice in what is becoming an alarming post-RDR industry trend. Money Marketing revealed last week Aviva not offer face-to-face investment and protection advice for its customers from 31 May. The move will affect around 120 advisers as part of the 2,000 […]

Multi-asset view: Government bonds remain under pressure

Recent market confidence has been supported by evidence that the harsher fiscal regime is having a milder impact on the US economy than had been feared. The growth in employment has been better than expected, leading us to believe the world’s biggest economy is starting to respond to the billions of dollars of stimulus that […]

MM leader: FCA’s approach to platform advertising is a mistake

The FCA published its final rules on platform charges last week and, after all the delay and speculation about the final outcomes, it still managed to include one or two small surprises. The decision to ban cash rebates was widely expected and, although unit rebates are still permitted, the decision by HMRC to treat them […]

Thumbnail

Neptune video: UK economy: a sustainable recovery?

After years of a slowly brewing economic recovery, the UK has seen a strong rise in growth in recent months. Mark Martin, manager of the Neptune UK Mid Cap Fund, discusses the strength of this recovery and whether it is sustainable.

In the video, Martin addresses the following:

• Structural features supporting the UK economy
• UK mid-caps and the potential for M&A activity
• Valuations and opportunities in house builders

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com