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increase in Alpari’s live accounts in just one year |
The Financial Services Authority has slapped Alpari with a £140,000 fine and its former money laundering reporting officer (MLRO), Sudipto Chattopadhyay with a fine of £14,000. According to the FSA report, Alpari failed to have in place adequate anti-money-laundering systems and controls and failed to monitor customer accounts, particularly customers based in Nigeria.
The report says: “FSA regulated firms should carry out risk assessments of the money laundering and financial crime risks that they are exposed to. However, between September 2006 and November 2008, Alpari failed to carry out thorough assessments and, as a result, put the firm at risk of being used to further financial crime.
“Alpari failed to carry out satisfactory customer due diligence procedures at the account opening stage and failed to monitor accounts adequately. These failings were particularly serious as Alpari’s customer base included those from higher-risk jurisdictions, such as Nigeria, and its customer relationships did not operate on a face-to-face basis.
“Alpari also failed to have in place adequate systems for screening customers against UK and global sanctions lists and for determining whether customers were politically exposed persons.”
Alpari’s customer base increased almost 30-fold between 2007 and 2008, from 400 live accounts to 11,500; it failed to expand its anti-money-laundering function in line with the growth of the business and placed too much responsibility on Chattopadhyay, says the FSA.
As Alpari’s MLRO at the time, Chattopadhyay was responsible for the breaches and is therefore fined. He cannot make any applications to the FSA for three years.
Margaret Cole, director of enforcement at the FSA, says: “These penalties serve as a reminder of the importance of maintaining effective anti-money-laundering controls – something we have repeatedly stressed. All firms should ensure that they minimize the risk of exposure to financial crime and we will continue to be extremely vigilant in this area.”
A spokeswoman for Alpari told Bloomberg: “No clients were impacted financially, and there is no evidence of any financial crime. We’ve implemented all the FSA’s recommendations and are confident we have now taken all the necessary steps.”
