- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
By 
Aaron Nicodemus2024-10-02T18:22:00
Britain’s first digital bank grew exponentially fast in five years, with 43,000 customers ballooning to more than 3.6 million by 2023. Starling Bank’s financial crime program, however, did not keep pace with its growth, according to the U.K.’s Financial Conduct Authority (FCA). In 2021, the regulator found serious deficiencies in the bank’s financial crime prevention system and ordered it to stop onboarding high-risk customers until improvements were made.
But Starling failed to comply with that order, opening 54,000 accounts for 49,000 customers at high risk of having financial sanctions from 2021-23. Over the same period, Starling reported multiple breaches of financial sanctions to the relevant authorities.
As a result of repeatedly failing to comply with its 2021 order, the FCA announced Wednesday that it fined Starling 29 million pounds (U.S. $38.5 million). The regulator noted that the investigation into the issues at Starling took 14 months to complete—significantly faster than the agency’s 42-month average the last two years.
THIS IS MEMBERS-ONLY CONTENT. To continue reading, choose one of the options below.
News and analysis for the well-informed compliance or audit exec. Select an option and click continue.
Annual Membership $499 Value offer
Full price one year membership with auto-renewal.
Membership $599
One-year only, no auto-renewal.
The U.K. Financial Conduct Authority has fined Metro Bank 16.6 million pounds (U.S. $21 million) for an alleged failure by its automated system to adequately monitor money laundering risks.
TSB Bank has been fined 10.9 million pounds (U.S. $14.2 million) for treating retail customers poorly while they were in arrears on mortgages, credit cards, loans, and overdraft accounts, the Financial Conduct Authority said.
Global sanctions rules are increasing rapidly, as are tools to detect and punish those who break them. In response, the U.K. government is creating a new Office of Trade Sanctions Implementation to investigate and penalize those who break sanctions rules.
A bank examiner and senior manager at the Federal Reserve Bank of Richmond pled guilty to insider trading after allegedly misappropriating confidential information on seven banks to make profitable trades.
New York-based investment firm Drexel Hamilton will pay more than $1.1 million in penalties, with four current and former employees paying fines as well over committing hundreds of violations of rules regarding the sale of municipal bonds.
A publicly traded cryptocurrency mining company will pay $10 million and completely change its business model to one with “lower corruption risk” as part of a settlement over violations of the Foreign Corrupt Practices Act (FCPA), two regulators announced.
