Basic Search  |  Summaries  |  Advanced SearchPenalty: £225,085
Year: 2021
Date: 24 November, 2021
Offence Group: financial offences
Offence Type: anti-money-laundering deficiencies
Violation Description:  An investigation in respect of Bridgewater by the Authority identified a number of regulatory failings. Bridgewater had not been fully meeting the Code requirements in relation to conducting its business risk assessment; had not been fully meeting the Code requirements in relation to conducting customer risk assessments; had not been fully meeting the Code requirements in relation to conducting its technology risk assessment; had not been fully meeting the Code requirements in relation to ongoing monitoring; had not been fully understanding the use of the complex structures within its business relationships and had not risk assessed these structures accordingly; was not fully meeting the Code requirements in relation to establishing the source of funds of customers (and source of wealth where required), and on the basis of the above, was contravening paragraphs 4, 5, 6, 7, 8, 13, 14, 15 and 31 of the Code. The Investigation identified a number of conflicts of interest, personally related to each of the directors of Bridgewater, which were not recorded on the conflicts register of Bridgewater. Such failure to record these conflicts of interest is contrary to the requirements of the Financial Services Rule Book 2016 (“the Rule Book”) and contrary to Bridgewater's own internal policies and procedures. The nature, extent and type of unrecorded conflicts of interest were of such a nature and frequency as to cause the Authority to conclude that the Civil Penalty was required. 3.2.1 had not been fully meeting the Code requirements in relation to conducting its business risk assessment; 3.2.2 had not been fully meeting the Code requirements in relation to conducting customer risk assessments; 3.2.3 had not been fully meeting the Code requirements in relation to conducting its technology risk assessment; 3.2.4 had not been fully meeting the Code requirements in relation to ongoing monitoring; 3.2.5 had not been fully understanding the use of the complex structures within its business relationships and had not risk assessed these structures accordingly; 3.2.6 was not fully meeting the Code requirements in relation to establishing the source of funds of customers (and source of wealth where required), and 3.2.7 on the basis of the above, was contravening paragraphs 4, 5, 6, 7, 8, 13, 14, 15 and 31 of the Code. 3.3 The Authority's officers, following the Inspection, also established that a number of entities administered by Bridgewater were not complying with their own respective obligations under the Code. 3.4 The s.23 report (and accompanying exhibits) details a number of recommendations deemed necessary by the third party professional firm to ensure that Bridgewater's anti-financial crime framework was appropriate to mitigate the risks associated with its activities. In particular, the s.23 report states that “the licenceholder has made, and proposes to make, some important positive changes to its financial crime framework, which are to be welcomed. However, there is further work to be done in order for the licenceholder to be satisfied that it is fully meeting its regulatory obligations.” 3.5 The s.23 report also identified a number of concerns regarding how Bridgewater identified and mitigated conflicts of interest within its existing customer base. The Investigation identified a number of conflicts of interest, personally related to each of the directors of Bridgewater, which were not recorded on the conflicts register of Bridgewater. Such failure to record these conflicts of interest is contrary to the requirements of the Financial Services Rule Book 2016 (“the Rule Book”) and contrary to Bridgewater's own internal policies and procedures. The nature, extent and type of unrecorded conflicts of interest were of such a nature and frequency as to cause the Authority to conclude that the Civil Penalty was required.
Agency: Isle of Man Financial Services Authority
Source of Data: (click here)