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The UK regulatory department Financial Conduct Authority (FCA) fined $7.9 million to the commodities investment broker ADM Investors Services International Limited for inadequate compliance with the Anti-Money Laundering (AML) regulations.
FCA stated on Monday that it had fined the ADM investors for being deficient in their compliance systems and controls. They also claimed that the nature of the business had a high level of money laundering risk, with their company activities and clients spread worldwide, including high-risk profiles such as politically exposed persons. The watchdog further asserted that they had not implemented rigorous anti-money laundering and counter-terrorist financing policies and procedures to mitigate the risk. They added that ADM needs to adopt adequate AML measures to combat crimes related to money laundering.
The regulatory authority claimed that it raised concerns with ADM in 2014. However, when it returned to the company two years later, in 2016, the authority discovered that reference laws had still been abolished and no firm-wide money laundering risk assessment had been conducted. FCA joint executive director of enforcement and market oversight, Therese Chambers, stated, “ADM Investor Services’ failures put it at risk of being used to facilitate financial crime. These failings continued even after the firm had received clear warnings on the need to improve its systems.”
ADM Investors is not a small-scale company; their services cover energy, base metals, and foreign exchange. Moreover, it facilitates over 180 million derivative contracts in a year. To defend its reputation against these allegations, the company accepted that its system to mitigate risk did not uphold the standards between 2014 and 2016; nonetheless, the watchdog identified no actual harm.
In the future, to protect themselves from such regulatory authorities’ fines, ADM Investors should strengthen their systems and processes to protect investors and the integrity of the global financial ecosystem. They must commit to engaging with their stakeholders to ensure they are held to the highest regulatory compliance standards. The company said in the statement, “ADMISI is pleased that the issue has been resolved and is confident in the actions put in place to meet all regulatory requirements.” FCA added that ADM accepted the FCA’s findings, which means it qualified for the 30% discount on the fine.
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