The Financial Conduct Authority (FCA) has fined Gatehouse Bank over £1.5m for substantial weaknesses in its financial crime system and controls.
Between June 2014 and July 2017, Gatehouse failed to conduct sufficient checks on tis customers based in countries with a higher risk of money laundering and terrorist financing.
The company also failed to undertake the correct checks when some of the customers were classed as politically exposed persons.
In one case, Gatehouse set up an account for a company based in Kuwait to aggregate customer funds. Gatehouse Bank did not require the company to collect information about customers’ source of funds or wealth, which was required under Gatehouse’s anti-money laundering policies.
Due to this, over a two-year period, Gatehouse accepted $62m into the account without properly vetting the funds for financial crime risks. Gatehouse has subsequently taken significant steps to improve its financial crime systems and controls.
FCA executive director of enforcement and market oversight Mark Steward said, “Gatehouse Bank’s failures exposed itself to the risk that it might be used as part of a laundering process for illegal funds. While not deliberate, there can be no excuse for failures as serious as this. The FCA will continue to hold firms to account for poor anti-money laundering systems and controls.”
The FCA recently fined Sigma Broking £531,000 for failing to report crucial reports regarding market abuse.
The FCA highlighted that three directors at Sigma Broking have also been fined amounts totalling over £200,000.
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