The Financial Services Authority (FSA) announced on May 10 that it had fined BNP Paribas Private Bank £350,000 (approximately $690,000) for weaknesses in its anti-fraud systems and controls. This is the first time a private bank has been fined for weaknesses in its anti-fraud systems.
Between February 2002 and March 2005 a senior employee was able to fraudulently transfer £1.4 million out of clients' accounts using forged signatures and instructions and by falsifying change of address documents. The fraud was detected in 2005 and brought to the attention of the FSA.
After the bank brought the fraud to the FSA's attention, it co-operated fully with the investigation and qualified for a 30% discount on the penalty imposed by agreeing to settle at an early stage.