COUTTS has been fined £8.75m for “significant, widespread and unacceptable” failings in its money laundering controls, its second regulatory penalty in four months.
The private bank, which is owned by Royal Bank of Scotland, was found to have made inadequate checks on clients who are considered “politically exposed persons” – people whose prominent position in public life might have made them vulnerable to corruption.
Despite finding no evidence of money laundering the Financial Services Authority (FSA) issued the fine after finding deficiencies in three–quarters of the high risk customers files that were reviewed.
Problems identified include a failure to “gather sufficient information to establish the source of wealth” of such clients and “assess adverse intelligence about prospective and existing high risk customers”.
The bank, led by chief executive Michael Morley (pictured), said it accepted the judgement: “Coutts has cooperated fully and openly with the FSA throughout the investigation. Coutts accepts the findings regarding certain failures to meet the relevant regulatory standards between December 2007 and November 2010.”
Coutts, which counts the Queen among its clients, faced a £12.5m fine if it had not agreed to settle at an early stage. In November it was fined £6.3m for failings related to the sale of a fund product during the run-up to the 2008 financial crisis.