The Financial Conduct Authority (FCA) has fined The TJM Partnership £2m for failing to ensure it had effective systems and controls to identify and cut the risk of financial crime.
According to FCA, TJM – which is currently in liquidation – did not have adequate procedures, systems and controls to identify and mitigate the risk of being used to facilitate fraudulent trading and money laundering in relation to trading on behalf of clients of the Solo Group between January 2014 and November 2015.
The company also failed to adequately apply its AML policies and did not properly assess, monitor and mitigate the risk of financial crime.
The FCA highlighted that trading executed by TJM on behalf of the Solo Group’s client throughout the 2014-2015 period was characterised by a ‘circular pattern of purported trades’ – characteristics that are highly suggestive of financial crime.
TJM executed trading to the value of approximately £59bn in Danish equities and £20bn in Belgian equities and received commission of £1.4m, which was a substantial proportion of the firm’s revenue in the period.
FCA added that the company also failed to identify or escalate any potential financial crime concerns and money laundering risks in two other instances related to Solo Group business.
FCA executive director of enforcement and market oversight Mark Steward said, “TJM allowed itself to become involved in a self-evidently suspicious scheme of circular transactions that looked like shams. TJM demonstrated a complete lack of care and diligence in participating in these transactions of dubious purpose.”
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