SBUK were fined £3.25m and have been prevented from accepting deposits from new customers for 168 days. 

The regulator issued the punishment after it found the bank had failed to maintain adequate AML systems between August 2010 and July 2014. 

Despite the FCA issuing warnings, SBUK was found to have serious and systematic weaknesses which affected almost all levels of its AML control and governance structure, including its senior management team.

While under investigation from the FCA, SBUK also failed to notify the regulator of an allegation of significant fraud.

Steven Smith, who was SBUK’s money laundering reporting officer (MLRO) and compliance officer from February 2011, has been fined £17,900 and prohibited from performing MLRO or compliance oversight functions at regulated firms. 

The FCA found that Mr Smith has failed to put in place appropriate AML monitoring arrangements and failed to identify serious weaknesses in operational controls.

He was also found to have told the bank’s board that controls were working well when they weren’t, as well as failing to report appropriately to the bank’s auditors concerns and the results of internal testing.

The FCA took into account that Mr Smith did not have sufficient senior management support and was overworked, but still regarded his failings as serious in their own right. 

They also found he had failed to exercise due skill, care and diligence in managing the business of the firm for which he was responsible.

“Fighting money laundering is an issue of extreme international importance and ensuring that AML controls are effective and viewed as important throughout the business are fundamental obligations of all regulated firms,” said Mark 
Steward, director of enforcement and market oversight at the FCA.

“There is an abundance of guidance for firms on how to comply with AML and financial crime requirements and no excuse for failing to follow it. 

“The FCA will not hesitate to take action against firms and senior individuals who fall short of our standards. 

“As in this case, such action may include using our powers to restrict a firm’s continuing business.” 

Both SBUK and Mr Smith agreed to settle at an early stage, which has allowed them to qualify for a 30% discount.