FCA to Weigh Use of Prosecutorial Powers in AML Cases: Enforcement Director
05 Apr 2019

The Financial Conduct Authority will not shy away from criminally prosecuting individuals responsible for egregious anti-money laundering failures, the head of enforcement at the agency said Thursday.

The supervisory authority, known as the FCA, currently has a “large number of investigations” on its docket, some of which are entering significant phases and involve suspected financial crimes and infractions of money laundering regulations, according to Mark Steward, director of enforcement and oversight at the regulatory agency.

The cases have the potential to result in legal trouble for individuals working at institutions now that the FCA has applied its practice of conducting “dual track” market abuse investigations to its anti-money laundering (AML) probes, Steward said. Such investigations are “dual track” in that can result in either civil or criminal proceedings.

“It is time that we gave effect to the full intention of the Money Laundering Regulations (MLRs) which provide for criminal prosecutions,” Steward told attendees of the Global Investigations Review Live event in London. “In making poor AML systems and controls potentially a criminal offence, the MLRs are signalling that, in egregious circumstances, MLR failures let down the whole community.”

Decisions by the FCA to pursue criminal charges, rather than regulatory penalties, will be “exceptional,” according to Stewart.

“However, we need to enliven the jurisdiction if we want to ensure it is not a white elephant and that is what we intend to do where we find strong evidence of egregiously poor systems and controls and what looks like actual money laundering,” he said.

Last month, the FCA imposed a fine of nearly £35 million on Goldman Sachs for failing to properly report transactions over a 10-year period. As with other recent investigations, FCA officials concluded that the firm’s senior management was either “invisible” or lacked the power to sufficiently escalate compliance problems so that they could be resolved internally.

Read more:

Has the FCA Gone Soft on the Banks?

UK regulator FCA fines Tesco Bank £16.4m for cyber-attack, financial crime failures

Goldman Sachs fined £34 million by UK regulator FCA over poor transaction reporting


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