Money Laundering Reporting Officer Fined

The Financial Servies Authority of the United Kindom fined Sindicatum Holdings Limited £49,000 and its money laundering reporting officer (MLRO), Michael Wheelhouse, £17,500 for not having adequate anti-money laundering systems and controls in place for verifying and recording clients’ identities. [FSA fines firm and MLRO for money laundering controls failings]  Apparently this is the first time the FSA has fined a money laundering reporting officer. The FSA did not find any evidence of money laundering at the firm.

In the final notice for Mr Michael Wheelhouse, the FSA states:

2.1. Throughout the Relevant Period, Mr Wheelhouse was approved by the FSA to perform and performed the controlled function of Money Laundering Reporting Function (CF11). As such, he was the Firm’s money laundering reporting officer. In that role, he had responsibility for oversight of the Firm’s compliance with the FSA’s rules on systems and controls against money laundering.

2.2. However, in performing that role and discharging CF11, Mr Wheelhouse failed to take reasonable steps to ensure that the business of the Firm for which he was responsible in his controlled function complied with the relevant standards and requirements of the regulatory system (as required by Statement of Principle 7 of APER (“Statement of Principle 7”)).

2.3. Mr Wheelhouse breached Statement of Principle 7 by failing to take reasonable steps to implement adequate procedures for verifying the identity of the Firm’s clients; by failing to ensure that the Firm adequately verified the identity of a significant number of its clients; and by failing to ensure that the Firm kept adequate records to demonstrate that it had verified the identity of a significant number of its clients.