Aberdeen fined £7.2m by watchdog for client cash failures

 
City A.M. Reporter
THE MARKETS watchdog has fined Aberdeen Asset Management £7.2m for failing to protect client money properly over three years to 2011.

Regulators have been on alert since the collapse of Lehman Brothers bank in 2008 highlighted the difficulties customers can face in getting their money back if it is not kept separate.

Under Financial Conduct Authority rules institutions are required to ringfence client money so that if a firm fails money can be returned as soon as possible.

The FCA said the asset manager, one of Europe’s largest, failed to identify and properly protect uninvested customer money it placed in money market deposits with third party banks between September 2008 and August 2011 to earn short-term interest.

The average daily balance affected by the breach of rules was £685m.

“Proper handling of client money is essential in ensuring that markets function effectively. Where they fall short of our standards, firms should expect the FCA to step in and take action to avoid a poor outcome for their clients, and ultimately, consumers,” said FCA head of enforcement Tracey McDermott.

The company said it regrets what happened and that no clients suffered any loss.