Money laundering law news 31 October 2008 FSA fines money laundering reporting officer 17,500

A senior manager at Sindicatum Holdings, nominated as the firms money laundering reporting officer by the Financial Services Authority (FSA), was fined £17,500 last week for failures under money laundering law. This is the first instance of a compliance officer being fined by the FSA.

The watchdog did not find evidence of money laundering having occurred, but did identify lapses in client identification, or know your client rules, that could have allowed the proceeds of crime to have been transferred through the firms accounts without being identified as such. It also considered that the breaches were serious and long-standing.

In the published notice issued by the FSA, it was stated that the firm did not fully implement the anti-money laundering and client identification and verification procedures contained in its AML Handbooks dated 2004 and 2006 (the Handbooks); failed to implement adequate procedures for verifying the identity of its clients; failed to adequately verify the identity of a significant number of its clients; and failed to keep adequate records with regard to the verification of the identity of its clients.

The fine was reduced by 30% as the manager settled early, co-operated with the FSA, and chose not to refer the matter to the Financial Services and Markets Tribunal. He has also undergone further money laundering training, and has taken steps to improve Sindicatums anti-money laundering practices. Had the settlement not been agreed at this earlier stage, the penalty to be imposed would have been £25,000.

Sindicatum was fined £49,000 for the lapses of its money laundering reporting officer.

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