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FSA launches review into how banks fight investment fraud

The FSA is launching a thematic review into banks procedures for finding and fighting investment fraud.

FSA acting director for enforcement Tracey McDermott says the regulator will examine how banks can prevent fraudulent schemes such as Ponzi schemes.

In a speech at the FSA’s Financial Crime Conference, McDermott said the review will probe banks’ role in countering these unauthorised businesses which depend on victims making payments from, and sometimes to, UK bank accounts.

She added such schemes may have been prompted by low investment returns offered by mainstream financial institutions.

The regulator has shut down three large pyramid schemes over the last 12 months, McDermott says tip-offs from the public were invaluable in this work.

The FSA is also launching a review into corruption and bribery and have a panel session this afternoon to discuss the new Bribery Act with representatives from the Serious Fraud Office and Ministry of Justice.

The FSA today published a consultation paper on financial crime, the findings of a review into mortgage fraud controls, and the findings of a review into how banks deal with money laundering.

The regulator has revealed that two banks have been referred to its enforcement division after spotting a number of serious weaknesses in their systems and controls for managing high-risk customers.

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Doesn’t the distribution of almost £25m in bonuses, which many consider not to have been earned, to FSA staff and directors constitute fraud? It seems that these people get paid their bonuses whether their performance as individuals and that of the FSA as a whole have been good, bad or indifferent. And if the performance of certain individuals such as Clive Briault has been so bad that there really is no option but to boot them out, they get paid off with a massive golden parachute for “loss of office”, even when that loss of office is due to gross dereliction of duty. Nice work if you can get it.

  2. bankers……..do they Fight Fraud or embrace it!

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