On May 5, the UK Financial Services Authority (FSA) announced that it had fined Alpari (UK) Ltd., an online foreign exchange firm, £140,000 (approximately $210,000) for failing to have adequate anti-money laundering systems and controls. Its former money laundering reporting officer (MLRO), Sudipto Chattopadhyay, was fined £14,000 (approximately $21,000).
Between September 2006 and November 2008, Alpari failed to carry out the risk assessments of the money laundering and financial crime risks required under FSA rules. Alpari’s failures included:
- failing to carry out satisfactory customer due diligence procedures at the account opening stage and inadequate monitoring of accounts—these were regarded as particularly serious, as Alpari’s customer base included those from higher-risk jurisdictions and its customer relationships did not operate on a face-to-face basis;
- failing to have in place adequate systems for screening customers against UK and global sanctions lists and for determining whether customers were politically exposed persons; and
- failing to expand its compliance and anti-money laundering function in line with an increase in its customer base from 400 to 11,500 live accounts.
As Alpari’s MLRO during this period, with responsibility for compliance oversight and money laundering reporting, Mr. Chattopadhyay was accountable for these breaches and was therefore also fined. He also gave an undertaking to the FSA that he will not, for three years, apply to be permitted to hold a compliance oversight or MLRO role.
Both Alpari and Mr. Chattopadhyay received a 30% discount applied to their fine for cooperating fully with the FSA investigation and agreeing to settle at an early stage. The FSA also took into account the fact that Alpari and Chattopadhyay had put in place a remedial action plan to address the failings.
Margaret Cole, the FSA’s Director of Enforcement, said: “The FSA expects firms to assess the financial crime risks to which they are exposed properly. The FSA also expects expanding businesses to commit sufficient resource to their compliance and anti-money laundering functions. Alpari failed to operate and maintain adequate money laundering systems and controls, leaving it open to the risk of financial crime.”
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