Showing posts with label Drug Trade. Show all posts
Showing posts with label Drug Trade. Show all posts

Wednesday, March 28, 2012

UK Regulator Fines Queen’s Bank, Coutts, $13.8M for Poor Money Laundering controls


By Associated Press, Published: March 26

LONDON — Britain’s financial regulator said Monday that it had fined the queen’s bank, Coutts Bank, 8.75 million pounds ($13.8 million) for failing to maintain effective controls to prevent money laundering and monitor the accounts of high-risk clients.

“The failings at Coutts were serious, systemic and were allowed to persist for almost three years,” the Financial Services Authority said. “They resulted in an unacceptable risk of Coutts handling the proceeds of crime.”

Coutts, part of the Royal Bank of Scotland Group, specializes in private banking and wealth management. Known as the banker for Queen Elizabeth II, Coutts offers free current accounts to customers who invest at least 250,000 pounds. The division reported an operating profit of 321 million pounds in 2011.

The bank said the fine related to activity between 2007 and 2010.

“Since the FSA first raised its concerns, we have implemented a number of improvements to prevent any recurrence of these failings,” said Rory Tapner, chief executive of RBS’ Wealth division. “Regulatory reforms continue apace.”

The FSA said it found deficiencies in three-quarters of the files on high-risk and politically exposed clients that it reviewed.

The investigation which began in October 2010 identified four issues: failure to establish the source of wealth and funds of prospective high-risk customers; failure to identify or assess intelligence about such customers and take appropriate steps; failure to keep files on high-risk customers up to date; and failure to scrutinize transactions made through their accounts.

“Coutts was expanding its customer base which increased the number of high-risk customer relationships,” said Tracey McDermott, acting director of enforcement and financial crime.

“The regulatory environment in relation to financial crime had also changed. It is therefore particularly disappointing that Coutts failed to take appropriate steps to manage its anti-money laundering risks.”

Coutts dates its history to 1692 when John Campbell opened shop as a goldsmith banker in The Strand.

Illustrious clients have included Charles Dickens, William Pitt, the Duke of Wellington, David Livingstone, P.T. Barnum and Frederick Chopin.

Coutts has served as royal banker since the time of King George III in the 18th century, according to The London Encyclopedia.

The bank got a 30 percent discount on the maximum FSA fine by agreeing to settle at an early stage, the agency said.

In a review published last year, the FSA reported widespread failings among British banks on managing high-risk accounts. For example, it said three-quarters of banks it studied failed to adequately check the legitimacy of a prospective client’s funds, while more than half failed to identify or record adverse information about a client.