CACEIS UK, an asset servicing bank,
has been censured by the FCA and will make a £31.7 million
voluntary payment to WealthTek clients for failing to act on
information that left clients exposed to the risk of financial
crime.
The FCA has
now secured over £57
million in total
for WealthTek clients in just
over a
year, with action taken against CACEIS UK, Sapia Partners and Barclays
Bank UK.
CACEIS UK became WealthTek's
sub-custodian in November 2020, meaning they were responsible for
keeping its client's assets safe. WealthTek was then known as
Vertus Asset Management LLP.
On three occasions, CACEIS UK checked
the Financial Services Register which showed that WealthTek
wasn't authorised to hold certain client assets but did not take
sufficient action. The firm also did not spot that WealthTek was
not allowed to hold client money. However, it went on to open
client accounts for WealthTek to
use, then failed
to monitor those accounts properly by not promptly reviewing and
resolving alerts raised by their
system.
Therese Chambers, joint executive
director of enforcement and market oversight at the FCA,
said:
Strong financial crime controls keep
clients' assets safe. CACEIS UK's failures exposed clients to
serious risk.
The firm chose to do the right thing
with extensive co-operation and agreeing to a substantial
voluntary payment, and we decided not to impose a fine as a
result.
The voluntary payment will be
distributed to WealthTek clients who
have not been able to reclaim their money in
full.
The FCA concluded its investigation
in 13 months. This is an example
of how it is improving the pace
of its investigations.
Notes to
editors
-
Final Notice: CACEIS UK
(PDF)
-
In November
2020, CACEIS Bank S.A. merged with KAS
Bank N.V.
-
WealthTek LLP
was regulated by the FCA from 28 January
2020 until 4 April 2023 when the FCA took action to order the firm to cease
operations and to
appoint Special Administrators. Clients can see updates
from WealthTek's administrators here.
-
Were it not for CACEIS UK's
co-operation and its agreement to make a voluntary
ex-gratia payment of £31,714,068 for
the benefit of WealthTek's clients, the Authority
would have imposed a financial penalty of
£23,091,000 (after a 30% discount for agreeing to
settle the matter).
-
Of the
£31.7m, WealthTek's administrators will receive £30.9m, and
the Financial Services Compensation Scheme (FSCS) will
receive £800,000 (in accordance
with its statutory duties to pursue recoveries where
reasonably possible and cost effective).
Once the FSCS has concluded any
further recovery actions, it
will proceed to make distributions of any
surplus to WealthTek's FSCS eligible
clients, under the rules set out in the Compensatin
Sourcebook of the FCA's Handbook.
-
In December 2024, the FCA
separately charged WealthTek's principal
partner with multiple criminal offences,
including fraud and money
laundering.
-
A trial has been scheduled for September 2027 at Southwark Crown Court in the
criminal proceedings brought by the FCA against John Dance, the
former principal partner
of WealthTek LLP.
-
The FCA
fined Barclays Bank UK PLC £3,093,600 for poor handling of financial crime
risks in relation to a client money account opened
by WealthTek. Barclays also agreed to make a voluntary
payment of £6,281,757 for distribution
to WealthTek's clients who have a shortfall in the
money they have been able to
reclaim.
-
Sapia Partners LLP agreed to make a voluntary
payment of £19,637,950 for
distribution to WealthTek clients who
have a shortfall in the money they have been able to
reclaim, and the FCA has censured the
firm.
