Release Date: 5th March 2015
To access the original FCA document, click here.
Summary
The Financial Conduct Authority (FCA) has fined Bank of Beirut (UK) Ltd £2.1 million and imposed a 126-day restriction on acquiring new customers from high-risk jurisdictions. The penalties were due to the bank repeatedly providing misleading information about its financial crime systems and controls. Additionally, Anthony Wills, former compliance officer, and Michael Allin, internal auditor, were fined £19,600 and £9,900 respectively for failing to cooperate with the FCA.
Key Points:
- Entity Fined: Bank of Beirut (UK) Ltd
- Fines: £2.1 million
- Restriction: 126-day ban on acquiring new high-risk jurisdiction customers
- Individuals Fined: Anthony Wills (£19,600) and Michael Allin (£9,900)
Misconduct Details:
- Misleading Information: The bank falsely assured the FCA that it had addressed financial crime risk concerns.
- Compliance Failures: Wills and Allin did not manage the bank’s compliance effectively and provided misleading communications to the FCA.
- Cultural Issues: Identified during 2010 and 2011 supervisory visits, there was insufficient consideration of financial crime risks within the bank’s culture.
FCA’s Position:
Georgina Philippou, Acting Director of Enforcement and Market Oversight at the FCA, emphasized the need for accurate information from firms to ensure consumer protection and market integrity. The misleading information from the Bank of Beirut and its employees significantly hindered the FCA’s regulatory efforts and increased the risk of financial crime.
Compliance Actions and Failures:
- Anthony Wills: Handled communications with the FCA and dismissed regulatory concerns about compliance.
- Michael Allin: Provided false assurances that required process improvements were made.
- Senior Management Influence: While influenced by senior management, Wills and Allin were expected to uphold regulatory standards and resist undue pressure.
Cooperation and Penalties:
- Early Settlement: The bank, Wills, and Allin settled early, receiving a 30% discount on their fines.
- Penalties Without Discount: Without early settlement, the bank’s fine would have been £3 million and the restriction period 180 days. Wills and Allin would have faced fines of £28,000 and £14,100 respectively.
Key Takeaways for Other Firms:
- Transparent Communication: Ensure all communications with regulators are accurate and transparent.
- Robust Compliance Systems: Implement strong financial crime controls and risk management systems.
- Uphold Regulatory Standards: Compliance officers and auditors must maintain integrity and resist undue pressure from senior management.
- Prompt Remediation: Address regulatory concerns promptly and accurately to avoid severe penalties and restrictions.
The FCA’s actions against Bank of Beirut, Wills, and Allin serve as a stern reminder of the importance of maintaining robust compliance frameworks and ensuring transparency with regulators to uphold market integrity.
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