The Jersey Financial Services Commission (JFSC) has issued civil financial penalties totalling more than £719,000 against three SG Kleinwort Hambros firms.
As a result of the lack of documented detail of Board discussions, the Boards of the SGKH Entities (the Boards) were unable to demonstrate they adequately monitored and controlled the SGKH firms’ activities. On the facts of the case, the JFSC considers that had robust oversight been exercised by the Boards and had they adequately responded to the issues being raised with respect to the Compliance Function, the matters identified during the On-Site Examination could have been mitigated.
JFSC Director General, Martin Moloney commented: “This is the third time the JFSC has used its powers to fine businesses in Jersey’s financial services industry for breaching regulatory requirements. The three SG Kleinwort Hambros firms acknowledged their failings at an early stage and have taken steps to make material changes to strengthen their governance arrangements and compliance systems and controls.
“We do not use this sanction lightly and intend it to be a deterrent for all regulated businesses. Whilst there is no evidence the three SGKH firms facilitated financial crime, firms must make sure they are not at risk of being used in this way, as such use would undermine the integrity and stability of Jersey’s financial services industry”.
The JFSC has issued a public statement outlining the background to the breaches and its findings which can be found here.
For information – because the three firms agreed to settle at an early stage of the process, they each qualified for a 50% discount (stage one) under the JFSC’s settlement procedure. Had the firms not settled, they may have been liable to civil financial penalties totalling approximately £1,400,000.
