The Financial Services Authority has imposed a £14,000 penalty on an individual money laundering reporting officer (MLRO), in a case that is likely to raise concerns among those fulfilling the role at law firms.
The FSA fined foreign exchange services provider Alpari (UK) £140,000 for failing to have adequate anti-money laundering controls and systems in place. It also issued a £14,000 fine against former MLRO Sudipto Chattopadhyay, which is understood to be only the second time that an individual MLRO has been fined. As MLRO, Chattopadhyay was accountable for the breaches, although the FSA noted that Alpari had placed too much responsibility on him.
The FSA said that, despite increasing its customer base from 400 to 11,500 live accounts between mid-2007 and mid-2008, Alpari did not expand its compliance and anti-money laundering function.
Both Alpari and Chattopadhyay cooperated fully with the investigation and agreed to settle at an early stage, qualifying for a 30% discount to their financial penalties. Alpari’s customer base included clients in high-risk jurisdictions such as Nigeria, and the company had failed to screen against UK and global sanctions lists.
Sue Mawdsley, a partner at Liverpool firm Legal Risk, said: ‘Law firms face the same pitfalls. The biggest firms often have sophisticated ways of checking whether an individual or company is on the sanctions lists, but smaller firms don’t have the resources to do so. The lists range from high-profile offenders like Zimbabwe’s president Robert Mugabe down to a back street workshop in Bradford, so rigorous compliance is essential.’
An Alpari (UK) spokeswoman said no clients had been affected financially and there was no evidence that any financial crime took place.