Release Date: 12th November 2021
To access the original FCA document, click here.
Summary
Sunrise Brokers LLP has been fined £642,400 by the Financial Conduct Authority (FCA) for serious failings in financial crime controls related to cum-ex trading activities. The fine addresses deficiencies in their anti-money laundering systems and controls, specifically concerning trades introduced by the Solo Group between 17 February 2015 and 4 November 2015. The FCA identified that Sunrise facilitated suspicious trading patterns indicative of financial crime, including enabling withholding tax reclaims in Denmark and Belgium.
Key findings include:
- Failure to identify or escalate financial crime concerns in two notable instances, where trades were executed at nearly double the market price and payments were accepted from a UAE-based entity linked to the Solo Group.
- General lack of due skill, care, and diligence in applying anti-money laundering policies and monitoring financial crime risks.
Key Takeaways for Other Firms:
- Implement Robust Controls: Ensure anti-money laundering systems and controls are comprehensive and effective.
- Thorough Due Diligence: Conduct proper due diligence on all trades and clients, especially those introduced by third parties.
- Monitor Suspicious Activities: Vigilantly monitor and escalate any suspicious transactions or patterns indicative of financial crime.
- Regulatory Compliance: Regularly review and update compliance policies to adhere to regulatory standards and avoid facilitating financial crime.
- Collaboration with Authorities: Cooperate with regulatory and law enforcement agencies to maintain the integrity of financial markets.
In conclusion, the FCA’s action against Sunrise Brokers LLP highlights the critical importance of stringent financial crime controls and the need for firms to maintain rigorous compliance standards to prevent facilitating fraudulent activities.