The Financial Services Authority (FSA) has today fined Investment Services UK Limited (ISUK) £175,000 for conducting its business without due skill, care and diligence and for failing to control its business effectively in relation to anti-money laundering (AML) systems and controls.
The firm’s Managing Director, Ram Melwani, has been fined £30,000. He is the first approved person to be fined for AML-related breaches. He failed to act with due care, skill and diligence, failed to ensure his firm complied with AML requirements and was knowingly concerned in the actions taken by ISUK.
ISUK is an emerging market bond broker. Its clients are corporate vehicles established for trading purposes and operated by non-resident, wealthy individuals. The vehicles are incorporated in offshore jurisdictions, some of which have AML controls weaker than those in the UK. They are therefore seen as having a high risk money laundering profile.
ISUK helped its clients to open accounts with a particular bank so they could participate in bond trades. But it failed to provide the bank with the appropriate information about the account users to assess the risks to which it was exposed. As a result of ISUK’s actions, a small number of individuals were able to operate anonymous accounts and over £8 million entered the UK financial system without the bank knowing the identity of its customers or the source of their funds.
In addition, when opening some accounts, ISUK used introduction certificates which are intended to demonstrate that all necessary customer due diligence had been conducted. However, some certificates contained misleading information.
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Detailed news link: here