Major shift in UK's Financial Conduct Authority strategy: Criminal powers to be used in up to eight
The Financial Conduct Authority of the United Kingdom has indicated that it will use criminal powers in two upcoming anti-money laundering investigations.
The shift in strategy follows the start of criminal proceedings against NatWest in March of last year, which resulted in a £265 million settlement last month.
The FCA has now stated that a total of eight cases may result in criminal investigations. Out of the 40 active cases it is investigating, the authority claims it has already determined that two criminal investigations are ongoing. Separately, up to six more cases could result in criminal prosecutions, with no decision yet made on whether to pursue criminal or civil charges.
Today, a representative from the FCA confirmed that these cases involved companies that failed to locate customer funds.
There are 29 regulatory investigations, two criminal inquiries, and three civil cases among the 40 active cases.
Six cases have been identified as "dual-track" investigations, which means the FCA hasn't decided whether to pursue a criminal or regulatory investigation.
NatWest was fined £265 million in December for failing to comply with anti-money laundering regulations. Fowler Oldfield, a gold-dealer and jeweller in Bradford, was the focus of the investigation, which one employee described as the "most suspicious money laundering" he had ever seen.
The case was widely regarded as a watershed moment in British anti-financial crime, with many expecting it to serve as a major deterrent to other lenders, prompting banks to beef up their anti-money laundering defenses across the board.
Since July 2020, the watchdog has shelved five criminal investigations into money laundering flaws, according to information gathered by law firm Eversheds Sutherland.
The FCA's Executive Director of Enforcement and Market Oversight, Mark Steward, refuted claims that the cases were dropped due to a lack of funds. Mr. Steward told the Financial Times that the FCA's decision-making on "how we investigate and what we investigate" is "determined not by resources but by the merits of each individual case."
The FCA's Chief Executive Nikhil Rathi revealed that the NatWest investigation took 30,000 staff hours, 300,000 documents to review, and 350 rounds of legal exchange with the lender.
By fLEXI tEAM