Blog

Update

Broker ADM Investor Services International Limited (ADMISI) has been fined £6,470,600 for having inadequate anti-money laundering (AML) systems and controls in place. 

The FCA concluded that ADMISI’s business model and client base presented potentially high levels of money laundering risk. The geographical location of its customers, the proportion of its business involving high-risk clients, and its having Politically Exposed Persons as clients all contributed to this risk.

The FCA first raised its concerns about the ADMISI’s AML systems with the firm in 2014, highlighting the absence of a formal process for classifying customers by risk. The FCA made clear that it expected ADMISI to make improvements.

During a firm visit in 2016, however, the FCA found significant failings remained including:

•    The firm’s AML customer risk assessment was basic
•    Specifically, it did not enable an assessment of a customer’s financial crime risk
•    ADMSI did not conduct a firm-wide money laundering risk assessment 
•    There was inadequate evidence of on-going monitoring, e.g. periodic customer reviews  
•    ADMISI’s policies were outdated and referred to old legislation.   

Following the 2016 visit, ADMISI agreed to the FCA’s requirements, including not taking on business from high-risk customers to reduce the threat of the firm being used to launder money or finance crime. By the end of October 2016, ADMISI had introduced AML policies and procedures to address the concerns identified. After further remedial action, the requirements were lifted in January 2018.

Therese Chambers, joint executive director of enforcement and market oversight at the FCA, said ‘All financial firms need to have effective anti-money laundering checks in place. ADM Investor Services’ failures put it at risk of being used to facilitate financial crime. These failings continued even after the firm had received clear warnings on the need to improve its systems.’

The firm did not dispute the FCA’s findings and exercised its right, under the FCA’s partly contested case process, to ask the FCA’s Regulatory Decisions Committee to assess the appropriate level of penalty. Accepting the FCA’s findings meant ADMISI qualified for a 30% settlement discount on a penalty that would otherwise have amounted to £9,243,738.

Links: https://www.fca.org.uk/news/press-releases/fca-fines-admisi-serious-financial-crime-control