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 fines and restrictions were due to the bank repeatedly providing misleading information regarding 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 regulator.
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 provided false assurances that it had addressed financial crime risk concerns, which it had not.
- Compliance Failures: Wills and Allin failed to handle regulatory queries transparently and cooperatively, misleading the FCA about the completion of required actions.
- 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, highlighted the critical need for firms to provide accurate information for consumer protection and market integrity. The misleading communications from the Bank of Beirut and its employees impeded the FCA’s regulatory efforts and increased the risk of financial crime.
Compliance Actions and Failures:
- Anthony Wills: As the main communicator with the FCA, he dismissed regulatory concerns about compliance.
- Michael Allin: Provided false assurances that required process improvements were made.
- Senior Management Influence: Wills and Allin were influenced by senior management but 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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