FCA Fines Broker £6.5m for Historic AML Failings

The Financial Conduct Authority (FCA) has ordered ADM Investor Services International Limited (ADMISI), a broker affiliate of Archer Daniels Midland, to pay almost £6.5m for serious financial crime control failings.

The financial regulator hit the commodities services broker with a fine of £6,470,600 for deficiencies in ADMISI’s anti-money laundering (AML) systems and controls first flagged in 2014.

ADMISI, which is a full-service multi-asset brokerage company with an international reach, did not dispute the FCA’s findings, which meant that the firm qualified for a 30% settlement discount, reducing the financial penalty from a hefty £9,243,738.

The fine was especially large due to the nature of ADMISI’s business and client base that presented significant levels of money-laundering risk, including the global nature of ADMISI’s businesses and because it had Politically Exposed Persons as clients.

ADM’s services include potentially high-risk products, including base metals, foreign exchange and cocoa.

The FCA first raised concerns in 2014 with ADMISI about its AML systems, including the absence of a formal process to classify customers by risk. However, when it returned in 2016, the broker had failed to make sufficient improvements.

The FCA’s report found that:

  • The firm’s AML customer risk assessment was basic and did not enable an assessment of a customer’s financial crime risk.
  • It did not conduct a firmwide money-laundering risk assessment.
  • There was little evidence of adequate on-going monitoring in the form of periodic customer reviews. 
  • Policies were outdated and referred to old legislation.  

The FCA said the company’s AML policy had been revised in 2012 and 2013 but remained identical to the 2003 version, despite the law changing.

The FCA said: “This meant the policy referred to regulations which were around 12 years out-of-date and had since been replaced twice. This was important.”

Therese Chambers, Joint Executive Director of Enforcement and Market Oversight at the FCA, said: “All financial firms need to have effective anti-money laundering checks in place.

“ADM Investor Services’ failures put it at risk of being used to facilitate financial crime. These failings continued even after the firm had received clear warnings on the need to improve its systems.”

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