Author: Syedur Rahman 15 November 2021
The Financial Conduct Authority (FCA) fining Sunrise Brokers £642,400 led to Syed Rahman explaining the implications of the case.
Syed told Thomson Reuters’ Regulatory Intelligence that this was a case where the fine for anti-money laundering (AML) failings was a way to continue Cum-Ex proceedings pending possible larger enforcement action. In an earlier enforcement action related to Cum-Ex, the FCA fined another broker, Sapien Capital, £178,000 for AML failings.
Syed explained that the FCA had said the underlying trades in the Sunrise case constituted characteristics which were highly suggestive of financial crime. He added that the fine imposed for AML failings was small. This, he argued, could lead to other organisations subject to similar FCA investigations only budgeting for modestly-sized fines, meaning there is little deterrence value in the proceedings.
The FCA had found that Sunrise had deficient systems and controls for identifying and mitigating the risk of fraudulent trading and money laundering. These failings related to transactions linked to Cum-Ex, the controversial share-selling practice employed to claim tax rebates that has now prompted investigations across Europe.
Syed's article featured on Thomson Reuters Regulatory Intelligence. (Subscription Required)
Syedur Rahman is known for his in-depth experience of serious fraud, white-collar crime and serious crime cases, as well as his expertise in worldwide asset tracing and recovery, civil recovery, cryptocurrency and high-stakes commercial disputes.