The Jersey Financial Services Commission (JFSC) has issued fines to three SG Kleinwort Hambros firms totalling more than £719,000 ($997,109, €826,540).
This comes after an investigation found that the boards of the entities were unable to demonstrate they “adequately monitored and controlled” their activities, JSFC said.
The three firms in question were SG Kleinwort Hambros Bank, SG Kleinwort Hambros Trust Company and SG Kleinwort Hambros Corporate Services.
From the findings of the on-site investigation, the JFSC concluded that the firms “failed to demonstrate they had adequate risk management systems in place” and that they failed to write to the regulator as soon as they became aware of the issues which required notification.
The failures were “significant and material because it left them under-informed of compliance risk” and left the businesses without the knowledge that they were operating with “robust systems and controls” to “mitigate against money laundering and the financing of terrorism”.
Response
The Jersey regulator said that the Kleinwort Hambros firms have co-operated fully.
They have also carried out a remediation exercise, where “significant financial resources have been invested”.
The JSFC said that “no customer or client has suffered losses” as a result of the failings.
International Adviser asked Kleinwort Hambros for a comment, but it did not reply in time for publication.
Finances
The three firms were fined accordingly:
- £510,599.67 to SGKH Bank;
- £155,476.54 to SGKH Trust; and
- £53,375 to SGKH Corporate.
The three businesses agreed to settle at an early stage of the process and qualified for a 50% discount.
Were it not for this, they may have been liable to civil financial penalties of approximately £1,021,199, £310,953 and £106,750, respectively.
‘Do not sanction lightly’
Martin Moloney, JFSC director general, said: “This is the third time the JFSC has used its powers to fine businesses in Jersey’s financial services industry for breaching regulatory requirements.
“The three SG Kleinwort Hambros firms acknowledged their failings at an early stage and have taken steps to make material changes to strengthen their governance arrangements and compliance systems and controls.
“We do not use this sanction lightly and intend it to be a deterrent for all regulated businesses.
“Whilst there is no evidence the three SGKH firms facilitated financial crime, firms must make sure they are not at risk of being used in this way, as such use would undermine the integrity and stability of Jersey’s financial services industry.”
