A compliance officer and an internal auditor at the Bank of Beirut (UK) Ltd misled the UK Financial Conduct Authority about steps taken by the bank to protect against financial crime.
The FCA fined Anthony Wills, the former compliance officer, £19,600 ($30,000). It fined Michael Allin, the internal auditor, £9,900 ($14,800).
The FCA said Wills and Allin “were influenced by senior management.” But their positions required them to resist the prssure, the FCA said.
The agency fined the bank £2.1 million ($3.15 million) and banned it from taking new customers for about four months.
The FCA said it had concerns about the culture within Bank of Beirut (UK) after supervisory visits in 2010 and 2011.
The regulator ordered the bank to strengthen its internal controls against financial crimes. Wills and Allin were responsible for the remediation and monitoring plans.
Wills, the compliance officer, handled most of the contact with the FCA. He downplayed FCA concerns and falsely confirmed that the changes the FCA ordered had been made.
Allin, the auditor, also “provided false assurance that the improvements to the firm’s processes had been made,” the FCA said.
Wills and Allin failed to deal with the FCA “in an open and cooperative way when responding to queries about the actions taken to mitigate financial crime risk,” the regulator said.
During the FCA’s investigation, Wills said the bank didn’t allot sufficient resources for him to do the compliance officer job. He said “at times he felt under pressure from senior management to be careful in his communications” with the FCA.
The FCA said it recognized that Wills “was influenced by comments made by senior management.” But the agency said the job pressures didn’t excuse his misconduct.
Georgina Philippou, the FCA’s acting director of enforcement and market oversight, said:
We are reliant on compliance officers and internal audit to act as an important line of defense, to support effective regulation at firms and to show backbone even when challenged by their colleagues.
Bank of Beirut (UK) settled early with the FCA. It had faced a fine of £3 million ($4.5 million) and a ban on new business for 180 days.
Wills and Allin also settled “at the first opportunity,” the FCA said. The FCA reduced their fines by 30 percent, the agency said.
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.