FSA Actions On Money Laundering

The FSA has released details of penalties it has imposed on both a firm and its MLRO for inadequate anti-money laundering systems and controls.

Alpari (UK) Ltd and Sudipto Chattopadhyay were fined £140,000 and £14,000 respectively (with the usual notification that these sums represent a 30% discount because both parties settled at an early stage) as a result of the FSA actions. The press release references the case of Sindicatum Holdings Ltd and its MLRO in 2008.This held the distinction of being the first time that an individual MLRO had been fined by the FSA as well as the firm.

Note that in the latest case there was no evidence of money laundering at Alpari nor that the firm acted in a ‘deliberate or reckless manner’, but was fined for having poor systems and controls in place.

Of particular interest is that the MLRO himself is credited with having identified and having begun to rectify the weaknesses in Alpari’s compliance and anti-money laundering functions before the FSA visited. The firm had already increased the headcount in the compliance department and that it was accepted that the firm had placed too much responsibility on the MLRO and failed to provide adequate support in the role (see 2.5 of Sudipto’s final notice) – but this was still not enough to escape FSA sanctions (the now ex-MLRO has also agreed not to apply for the role of CF10/CF11 for a period of three years).

Firms (and MLROs) may wish to review the findings in the Final Notice for the firm and the MLRO and compare them with their current situation considering whether an unexpected FSA thematic visit would give cause for concern. Although it is useful to read the final notices in full, as a starting point the failings of the firm are summarised in section 2.2 of its final notice and in section 2.3 of the individual’s final notice.

The FSA, in arriving at its conclusions and actions, has “had regard to the guidance issued by the JMLSG”. This guidance and the final notices can be found by clicking on the links next to this article. If this is something you are worried about, please speak to your Complyport contact.

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