FSA fines get personal

The first MLRO fined for money laundering control failings by UK regulator

LONDON – The Financial Services Authority (FSA) has fined Sindicatum Holdings £49,000 and its money laundering reporting officer (MLRO), Michael Wheelhouse, £17,500 for failing to have adequate anti-money laundering systems and controls in place to verify and record clients’ identities.

This is the first time the FSA has fined a money laundering reporting officer.

The FSA found a number of failings at the firm. It failed to implement adequate procedures for verifying the identity of its clients, to verify adequately the identity of a large number of its clients, and to keep adequate records with regard to the verification of the identity of its clients. Wheelhouse failed to take reasonable steps to implement adequate procedures for controlling money laundering risk.

William Amos, head of retail enforcement at the FSA, says: “It is vital to the integrity of the UK’s financial markets that regulated firms are not used by criminals to launder money. Senior management must implement and follow procedures that meet our requirements so the risks their firms face are properly managed.

“This fine is a warning to firms and individuals about the importance of complying with our rules in this area and we will not hesitate to clamp down on failures, where necessary.”

In deciding the penalty for Sindicatum, the FSA took into account the firm’s limited financial resources and its ability to pay the fine. Had it not been for these factors, the penalty would have been much larger, says the FSA.

Sindicatum and Wheelhouse have taken steps to review and improve the firm’s systems and controls in relation to financial crime.

The FSA did not find any evidence of money laundering at the firm.

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