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4 December 2008 - UK court fines solicitor & MLRO

On 4 December 2008 , a United Kingdom solicitor and money laundering reporting officer was fined £5,000 at Isleworth Crown Court for entering into an arrangement which facilitated the laundering of money.

The solicitor had transferred €14,000 into an Italian bank account for a client only days after receiving a court order outlining a number of offences, including carousel fraud, to which his client was about to plead guilty. The information included in the court order was important evidence in establishing whether the solicitor knew or suspected that the funds were criminal property.

 

Jonathan Krestin (60), the managing partner at Butcher Burns, a commercial and property firm of solicitors, was yesterday fined £5,000 on one count of money-laundering at Isleworth Crown Court. He was convicted on 19 November, after a two and a half week re-trial, of using the firm's client account to launder money belonging to Michel Namer, a French national and convicted fraudster. An investigation by HM Revenue and Customs showed that Krestin transferred 14,000 Euro from Namer to an Italian account of Namer's mistress and former lap dancer, Dzindzer Jeles, knowing or suspecting the monies to be criminal property. He was found not guilty in relation to three other counts.

 

The sum transferred was part of the proceeds of a 35,000,000 Euro Missing Trader Intra Community Fraud orchestrated by Michel Namer. The 14,000 Euro transfer was made just days after Krestin had been served with a court order cataloguing the criminal offences of which Michel Namer was suspected of and in relation to which he was about to plead guilty.

 

Namer was introduced to Krestin by a qualified tax advisor, Neil Macpherson. Macpherson was convicted at the first trial and sentenced to 3 years' imprisonment in June 2008. That jury could not agree on verdicts in relation to Krestin and so a re-trial followed. Click here to read more

 

28 november 2008 - HIBERNIAN DIRECT LIMITED: REPRIMANDED, MONETARY PENALTY €45,000 AND REFUNDS OF €16,000 TO CUSTOMERS

 

On Friday 28 November 2008, the Financial Regulator published a Settlement Agreement with Hibernian Direct Limited for breaches of General Principles 4 and 6 and Common Rule 5 in Chapter 2 of the Consumer Protection Code. The sanction agreed by Hibernian includes a reprimand, a monetary penalty of €45,000 and refunds to customers in excess of €16,608. Just last month (October 2008) Quinn Insurance Limited and Mr. Sean Quinn senior were collectively penalised €3,450,000 by the Financial Regulator. Other significant sanctions imposed this year include €80,000 levied on Fexco Stockbroking Limited (March 2008) and €50,000 levied on Irish Nationwide Building Society (October 2008).

 

Click here for our Briefing Note on the Hibernian decision. Click here for details of the Settlement Agreement in the matter of Hibernian and other Enforcement cases.

 

30 october 2008 - Warning: Credit Union members being targeted by sinister phishing scam: attempt to dupe members to hand over ATM/debit card details

 

Today at 13:20 we received a phishing email.  The phishing email is headed ‘Security Alert’.  It falsely states that it is from the Irish League of Credit Unions.  The email attempts to scare the recipient into believing that their ATM / debit card details have been compromised and requires them to reconfirm their financial details at the fraudster’s website (http://irldsxxcu.com/irlnd/index.htm) which copies the look and feel of the ILCU’s website.

 

Click here to see how the scam works.

 

29 october 2008 - UK FSA FINES FIRM & MLRO FOR INADEQuaTE AML SYSTEMS AND CONTROLS

 

On 29 October 2008, the UK FSA fined both Sindicatum Holdings Limited (SHL) £49,000 (Euro 62,450 / USD 80,650 / AUD 118,400) and its money laundering reporting officer (MLRO), Michael Wheelhouse, £17,500 (Euro 22,300 / USD 28800/ AUD 42,300) for not having adequate anti-money laundering systems and controls in place for verifying and recording clients’ identities. This is the first time the FSA has fined a money laundering reporting officer.

 

The FSA found a number of failings including:

  • the firm failed to implement adequate procedures for verifying the identity of its clients;
  • it failed to verify adequately the identity of a significant number of its clients;
  • it failed to keep adequate records with regard to the verification of the identity of its clients; and
  • Mr Wheelhouse failed to take reasonable steps to implement adequate procedures for controlling money laundering risk.

 

Click here to read more and visit our FSA Enforcement section

 

24 October 2008 - FInancial Regulator Levies record fine on Quinn Insurance and Sean Quinn Senior

 

On Friday evening before the October Bank Holiday, the Financial Regulator published a record settlement agreement with Quinn Insurance Limited ("QIL") and Mr. Sean Quinn senior. QIL has been required to pay a monetary penalty of €3,250,000 to the Financial Regulator. This represents a significant escalation in the size of settlements published by the Financial Regulator, eclipsing by a significant margin the previous highest penalty of €80,000 levied on Fexco Stockbroking Limited in March 2008 and the €50,000 levied on the Irish Nationwide Building Society earlier in the month.

 

Mr. Sean Quinn senior has also been personally required to pay a monetary penalty of €200,000, which is again significantly in excess of previously published agreements. The previous high water mark for personal financial sanctions was when Mr John Bohan and Mr Peter Hughes, directors of Apex Fund Services (Ireland) Limited were required by the Financial Regulator to pay a monetary penalty of €20,000 each back in August 2008. Mr. Quinn senior is also stepping down as Chairman and as a director of QIL.

 

Click here for details of penalties. Click here for the Financial Regulator's Settlement Agreement. Click here to see all IFSRA Enforcement cases.

 

Statement from Sean Quinn (senior), Quinn Insurance

Click here to read a reproduction of Mr Quinn's statement on the Settlement Agreement (the link is copyright of the Sunday Business Post published 25 October 2008. The Quinn Statement begins at the end of the second page).

 

16 October 2008 - EU COMMISSION takes legal action against ireland, spain, Belgium & sweden to ensure aml/cft compliance

IP/08/1522 - Brussels, 16 October 2008

Anti-money laundering: Commission takes action to ensure that Belgium, Ireland, Spain and Sweden implement EU laws

 

The European Commission has decided to refer Belgium, Ireland, Spain and Sweden to the European Court of Justice over non-implementation of the 3rd Anti-Money Laundering Directive. The transposition deadline for the Directive was 15 December 2007. The latest information on infringement proceedings concerning all Member States can be found at: http://ec.europa.eu/community_law/index_en.htm

 

Click here to read or previous story on EU Commission action and visit www.antimoneylaundering.ie for the latest information on Ireland's AML/CFT regime.

 

 

13 october 2008 - newsletter 5/2008 (october 2008)

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New pages added to website

We have added additional drop-down menu pages to our website under the 'Training/Seminars' and 'News & Resources' top level pages.

 

Our News & Resources page now includes a new 'Compliance Documents' drop-down page, providing details of manual and procedures we write and develop for firms (including examples of content). Our Training/Seminars page now provides four new drop-down pages covering public training, in-house training, eLearning and Seminars.

 

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19 September 2008 - Financial Regulator introduces prohibition on short selling of financial stocks

The Financial Regulator, acting in concert with the UK Financial Services Authority, announced an amendment to the Market Abuse Rules with immediate effect. The purpose of the rule change is to prohibit transactions or arrangements "which have the effect of generating a net economic benefit from a fall in the value" of shares in quoted Irish banks or insurance companies.

 

The wording of the rule is so broad that it may also prohibit short trades in index futures containing the underlying issuers as a component, hampering the ability of investors to hedge exposure to the Irish market as a whole. The rule change will also affect CFD trading and financial spread betting in the named issuers.

 

Click here for our Briefing Note. Full details of the changes in Ireland and the UK can be found on our Resources page.

 

27 August 2008 - Supreme Court Appeal: DAVY & FINANCIAL SERVICES OMBUDSMAN

Mr Meade's office is understood to have lodged papers in the Supreme Court yesterday in which he appeals the ruling last month of Mr Justice Peter Charleton that quashed his ruling in a complaint by Enfield Credit Union against Davy stockbrokers. The grounds for his appeal are not yet known. Neither is the likely timing of any hearing of the case. Click here to download the text of the original judgement delivered by Mr. Justice Charleton.

 

Notwithstanding the appeal, the Financial Ombudsman's website currently informs visitors that "Due to the High Court Judgment of 30 July 2008 the procedures for dealing with complaints are being revised and will be updated in due course."

 

22 August 2008 - NEWSLETTER 4/2008 (august 2008)

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22 August 2008 - Financial Regulator fines fund administration firm (€5,000) and DIRECTORS (€20,000 EACH)

The Financial Regulator has entered into a Settlement Agreement with effect from 8 August 2008 with Apex Fund Services (Ireland) Limited and Messrs John Bohan, Director, and Peter Hughes, Director.


The Financial Regulator reprimanded Apex Fund Services (Ireland) Limited, Mr John Bohan and Mr Peter Hughes and required the firm to pay a monetary penalty of €5,000 and Mr John Bohan and Mr Peter Hughes to pay a monetary penalty of €20,000 each. Click here to download the text of the settlement agreement. Click here to see all IFSRA Enforcement cases.

 

 

30 July 2008 - NEWSLETTER 3/2008 (JULY 2008)

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30 July 2008 - HIGH COURT JUDICIAL REVIEW: DAVY & FINANCIAL SERVICES OMBUDSMAN

On 30 July 2008, Mr. Justice Charleton delivered his judgement in the Judicial Review of J. & E. Davy trading as Davy (Applicant) and Financial Services Ombudsman, Ireland and The Attorney General (Respondents) and Enfield Credit Union (Notice Party). Click here to download the text of the judgement.

 

29 July 2008 - HIGH COURT: DIRECTOR OF CORPORATE ENFORCEMENT AND DCC

On 29 July 2008, Mr. Justice Kelly delivered his judgement in the matter of Director of Corporate Enforcement (Applicant) and DCC plc, S&L Investments Limited and Lotus Green Limited (Respondents). Click here to download the text of the judgement.

 

24 July 2008 - Financial Regulator amends QIF regime

The Financial Regulator has dropped the requirement for Qualifying Investor Funds to produce interim accounts and has increased the maximum percentage that can be invested into another collective investment scheme without being considered a feeder fund.

 

Click here for our Briefing Note. The amended Notices and Guidance Notes can be downloaded from our Resources page.

 

18 July 2008 - Ireland warned on EU money-laundering laws

Ireland has been formally warned by the European Commission to implement new money laundering legislation or face legal action. EU Internal Market Commissioner Charlie McCreevy wrote to 15 out of the 27 EU member states instructing these to implement the EU's Third Money Laundering Directive.

 

The Irish Times today (18 July 2008) reports Mr McCreevy as stating "The fight against money laundering and terrorist financing is a priority for both the Commission and the member states ... In these circumstances, the Commission has no other option but to proceed with legal actions . . . against those member states which have not implemented the directive, and to do so in as expeditious a manner as possible,".

 

Ireland together with Austria, Belgium, Czech Republic, Germany, France, Greece, Latvia, Luxembourg, Malta, Netherlands, Poland, Slovakia, Sweden and Spain received the warning.

 

In February 2008, the Irish Government approved proposals by former minister for justice Brian Lenihan for the introduction of the Criminal Justice (Money Laundering) Bill which would allow the EU directive to be transposed into Irish law.

The Irish Times today reports that a Department of Justice spokeswoman told The Irish Times “it is expected that the Bill will be published later in 2008”. Additional reporting: Reuters /© 2008 irishtimes.com

 

For details of our training courses on anti-money laundering and countering financing of terrorsim go to our training page by clicking here.

 

Please visit www.antimoneylaundering.ie for more information on the Irish AML/CFT regime.

 

16 July 2008 - EU Commission announces UCITS IV

The EU Commission’s Internal Market & Services Directorate General yesterday (16 July 2008) formally proposed the revision of the UCITS regime to incorporate previously-identified desirable improvements and to consolidate the existing legislation in the area. This UCITS IV process is hoped to be adopted by the EU Council of Ministers and the European Parliament by the second quarter of 2009, with the provisions entering into force in mid-2011. This initiative follows on from the 2005 “Green paper on the enhancement of the EU framework for investment funds” and an exposure draft discussing possible adjustments to the UCITS Directive published in March 2007.

 

Proposed changes include :

  • New rules on mergers
  • Master-Feeder funds
  • Key Investor Information
  • Marketing in other Member States
  • Management Company Passport

 

Click here for more information.

 

11 July 2008 - Another day, another broker sanction:  Settlement Agreement between the Financial Regulator and Frank J Murphy Insurance Brokers Ltd and Mr Frank Murphy and Mrs Terri Murphy

 

Evidence of the Financial Regulator's administrative sanction regime continues afoot with the revocation of the authorisation (by agreement) of broker Frank J Murphy Insurance Brokers Limited and the disqualification of directors (by agreement) Frank J Murphy and Terri Murphy for 5 years and 1 year respectively.  Suspected breaches occurred up to 24 October 2006 relating to breaches by the firm and Mr Murphy and Mrs Murphy of their obligations arising under Investment Intermediaries Act, 1995 (“the Act”) and the Handbook for Restricted Activity Investment Product Intermediaries (“the Handbook”). These breaches included:

  • a failure to lodge cash premiums received from Clients to the firm’s client premium account;
  • the improper handling and improper withdrawal of client premiums held in the firm’s client premium account;
  • the improper retention of client premium rebates;
  • a failure to notify the Financial Regulator of breaches of the Act and Handbook when the firm became aware of such breaches;
  • a failure to adhere to certain requirements contained in the Handbook; and
  • a failure to carry out monthly reconciliations of the firm’s client premium accounts and to keep proper books and records.

 

Click here to read the full regulatory notice issued by the (Irish) Financial Regulator. Click here to see all IFSRA Enforcement cases.

 

 

31 MAy 2008 - Financial Regulator extends Consumer Protection Code and Minimum Comptency Requirements to Retail Credit Firms and Home Reversion Firms

The Financial Regulator has published addenda to the Consumer Protection Code and the Minimum Competency Requirements to extend their scope to Retail Credit Firms and Home Reversion Firms with effect from 1 June 2008. Click here to view the documents on our Resources page.

 

 

21 May 2008 - Newsletter 2/2008 (May 2008)

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Financial Regulator reviews of insurance practices

 

In March 2008, the Financial Regulator wrote to all insurance intermediaries with feedback from a number of themed inspections of the insurance intermediary sector. The purpose of these inspections was to monitor whether insurance intermediaries were disclosing all relevant fees and charges in their terms of business document and whether the charges applied for their services were within the limits stated in this document. The themed inspections also sought to establish whether premium rebates were being transferred to consumers in full.

 

The Financial Regulator noted that in general, compliance levels were good in the majority of firms inspected, although a number of serious issues were noted. 

  • Incomplete prior disclosure of all charges
  • Fees charged in excess of those stated in the terms of business document
  • Premium rebates not remitted within time limits or subject to deduction
  • Optional benefits sold without consumer indication

 

Read the full press release for Charges and Premium Rebates here.

 

This followed a similar letter to industry from the Financial Regulator in January 2008 giving feedback on a thematic review of sales and claims handling relating to Serious Illness cover. In that earlier review the Financial Regulator identified the following issues:

  • The need to fully inform consumers of the key aspects of the product, especially restrictions and exclusions, was highlighted
  • Further focus on promoting full disclosure by the consumer at point of sale was encouraged as this was a major cause of subsequent claims being declined
  • Firms were asked to consider how best to highlight to customers the restrictions and exclusions regarding children’s claims

 

Read the full press release for Serious Illness Cover here.

 

 

minister approves drafting of new criminal justice (money laundering) bill 2008

 

 

On 12 February 2008, the Minister for Justice Equality and Law Reform, Mr. Brian Lenihan T.D., announced that his Department will draft a new Bill to transpose the EU’s Third Money Laundering Directive into Irish Law to strengthen the country’s current legislative provisions.  A period of consultation between the Minister’s Department and interested parties will take place before the completion of the drafting and publication of the Bill.

 

The new Bill will also address recommendations arising from the Financial Action Task Force (FATF) mutual evaluation report on Ireland’s published in 2006 and on the Council of Europe Convention on Laundering Search Seizure on the Confiscation of the Proceeds of Crime and on the Financing of Terrorism.  

 

The first link below will take you to the location of the relevant AML/CFT Scheme of Bill documents on our Resources page. The other three links will take you directly to the document you require. Compliance Ireland will submit comments to the Minister and any person who would like to join us in submitting comments may contact us at email@complianceireland.com

 

 

 

20 November 2007 - Newsletter 6/2007 (November 2007)

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Financial Regulator changes policy to permit UCITS to short-sell (but announces this QUIETLY)

 

The Financial Regulator has amended its policy with regard to short-selling by UCITS funds, permitting them to enter into short-selling of physical stock subject to certain control criteria. The move is to be welcomed as it clarifies the capability to conduct investment strategies such as 130/30 within the framework of a UCITS vehicle.

 

The ability to short sell was already available to UCITS funds through the use of Financial Derivative Instruments and the Financial Regulator will now premit this facility to be extended to physical stock under similar limits as would apply to FDI transactions. The change in policy will require an amendment to Notice UCITS 12 and to Guidance Note 3/03 which will be effected in due course.

 

Regrettably, release of this document was not highlighted in the News section of the Financial Regulator's website and the document is located on the website at the bottom of the Industry->Funds->Legislation & Guidance Notes menu tree. We have made a copy of the document available for download by clicking here.

 

ireland applies for mifid gold plating

 

The MiFID Directive is a 'maximum harmonisation directive'. As such the intention is to ensure a common treatment across the European Union without national 'gold-plating'. Nonetheless, the Directive carries within it a capability to apply for national gold-plating measures.

 

As Con Horan, Prudential Director put it: " We will not be super-equivalent to the MiFID unless it is justified. Such instances were and are expected to be the exception rather than the rule."

 

Notwithstanding the above, Ireland has become the second European jurisdiction to apply for a gold-plating exemption in order to retain particular national client money requirements.

 

While the Financial Regulator has declined to make public the application, a copy of the application letter and supporting documents obtained from the European Commission are available for download from Compliance Ireland's specialist MiFID site: www.mifid.ie, including a copy of proposed Client Asset Requirements to be effective from 1 November 2007.

 

 

archeus capital management & others Vs globeop financial services

 

Hedge Fund Manager Archeus Capital Management and a number of funds managed by it filed a complaint with the New York County Clerk's office on 2 July 2007 (index number 602195-2007). The complaint alleged that GlobeOp as administrator of the funds, failed to properly keep and reconcile records of transactions of the funds managed by Archeus, or to provide Archeus with timely and accurate reporting on the status of its transactions.

 

An agreement was reached between Archeus and GlobeOp and the complaint was withdrawn.

 

For a publicly filed document, the complaint provides a salient lesson into how an aggrieved party might seek to characterise operational and staffing difficulties encountered in administering a fund as a direct cause of financial loss, reimbursable by the administrator.

 

The complaint also quotes at length from GlobeOp's own marketing materials, emphasising the importance of ensuring that all of a firm's documentation accurately reflect its actual capabilities and offered services.

 

A copy of the full complaint can be found by clicking here.

 

 

Compliance Ireland Newsletter 4/2007 (July 2007)

You can read this Newsletter in Adobe format by clicking here

 

Compliance Ireland Newsletter 3/2007 (May 2007)

You can read this Newsletter in Adobe format by clicking here



CONTACT DETAILS:

Compliance Ireland Regulatory Services Limited

Lower Ground Floor, 13 Adelaide Road, Dublin 2, Ireland

ph +353 1 425 5962 email@complianceireland.com

Peter Oakes, Principal
+353 87 2731434
peter@complianceireland.com

Kevin O'Doherty, Principal:
+353 86 8280525
kevin@complianceireland.com


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