FCA Fines Metro Bank £16.7M Over ‘Financial Crime Failings’
The U.K.'s financial watchdog has fined Metro Bank £16.7 million for failing to “adequately monitor” over £51 billion worth of transactions—despite junior Metro staff raising concerns.
November 12, 2024 at 09:12 AM
3 minute read
The Financial Conduct Authority has fined Metro Bank £16.7 million for failing to “adequately monitor” over £51 billion of transactions for money laundering risks.
The FCA’s fine will draw the attention of in-house lawyers at financial institutions who are responsible for monitoring customer transactions for potential financial crime.
The relevant Metro transactions occurred between June 2016 and December 2020, the FCA said. In June 2016, Metro automated the monitoring of customer transactions for potential financial crime—but the system did not work as intended.
The FCA added: “Junior staff did raise concerns about some transaction data not being monitored in 2017 and 2018, but these did not result in the issue being identified and fixed.”
Metro joins a growing list of banks that have been fined by the FCA in 2024 so far—including Starling Bank, which was fined £29 million in October, and TSB Bank, which was fined £10.9m in the same month over its treatment of customers in financial difficulty.
Adam McLaughlin, a former AML compliance manager at J.P. Morgan, and currently global head of financial crime strategy at technology platform NICE Actimize, said Metro’s fine should be seen in the context of an FCA crackdown on the fintech sector over the last two years.
“Historically, the FCA has looked at the HSBCs and J.P. Morgans of this world—yes, they get things wrong and are not always perfect, but they have strengthened their controls,” he said.
“However, fintechs have tried to pursue rapid growth to challenge these incumbents, and often their growth spend exceeds their spend on compliance.”
McLaughlin added: “Another challenge with fintechs is that they haven’t always paid as much for staff as they pay in the big banks, and end up with people who have little experience or not enough experience.”
Commenting on the FCA’s fine of Metro, the regulator’s joint executive director of enforcement and market oversight Therese Chambers commented: “Metro's failings risked a gap being left in our defence against the criminal misuse of our financial system. Those failings went on for too long.”
The FCA stated that since the bank’s identification of the issues with its transaction monitoring system in April 2019, Metro has put in place processes to remediate the issues identified.
Daniel Frumkin, Metro Bank’s CEO, commented: “The conclusion of these enquiries draws a line under this legacy issue, allowing the bank to move forward and fully focus on the future, building on the solid foundations it has already laid. We are continuing, at pace, our shift towards higher yielding specialist mortgages and commercial, corporate and SME lending with a strong pipeline of business.”
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllTribunal Dismisses AML Case Against Kennedys’ Chief Risk Officer, But Ex-Partner Fined
2 minute readTrending Stories
- 1Nevada Supreme Court to Decide Fate of Groundbreaking Contingency Cap Ballot Measure
- 2OpenAI Tells Court It Will Seek to Consolidate Copyright Suits Under MDL
- 34th Circuit Allows State Felon Voting Ban Challenge to Go Forward
- 4Class Actions Claim Progressive Undervalues Totaled Cars
- 5How the Trump II Administration Can Combat Antisemitism
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250