CACEIS UK censured and to pay £31.7m to WealthTek clients for weak financial crime controls

CACEIS UK, an asset servicing bank, has been censured by the FCA and will make a £31.7m voluntary payment to WealthTek clients for failing to act on information that left clients exposed to the risk of financial crime.

The FCA has now secured over £57m in total for WealthTek clients in just over a year, with action taken against CACEIS UK, Sapia Partners and Barclays Bank UK.

CACEIS UK became WealthTek's sub-custodian in November 2020, meaning they were responsible for keeping its client’s assets safe. WealthTek was then known as Vertus Asset Management LLP.

On three occasions, CACEIS UK checked the Financial Services Register which showed that WealthTek wasn’t authorised to hold certain client assets but did not take sufficient action. The firm also did not spot that WealthTek was not allowed to hold client money. However, it went on to open client accounts for WealthTek to use, then failed to monitor those accounts properly by not promptly reviewing and resolving alerts raised by their system.

Therese Chambers, joint executive director of enforcement and market oversight at the FCA, said:

'Strong financial crime controls keep clients’ assets safe. CACEIS UK’s failures exposed clients to serious risk.

'The firm chose to do the right thing with extensive co-operation and agreeing to a substantial voluntary payment, and we decided not to impose a fine as a result.'

The voluntary payment will be distributed to WealthTek clients who have not been able to reclaim their money in full.

The FCA concluded its investigation in 13 months. This is an example of how it is improving the pace of its investigations.