The Financial Services Authority have 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 (www.fsa.gov.uk/pubs/final/alpari.pdf and www.fsa.gov.uk/pubs/final/chattopadhyay.pdf), 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.