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The Financial Conduct Authority has fined the investment firm TJM Partnership Limited £2m for serious financial crimes including money laundering.
TJM Partnership Limited is an investment firm which was found guilty by the FCA of illicit activities of money laundering worth £2m. The investment manager was caught unable to take necessary measures to detect and prevent the risks of illicit financial trading through their channels.
TJM which is now bankrupt was reported to have been involved in the facilitation of fraudulent trading and money laundering on the behalf of its customers from the Solo group between January 2014 to November 2015.
According to the FCA, the group was involved in illicit financial trading on the behalf of the Solo Group’s clients throughout the execution of fraudulent processes. In fact, TJM Partnership Limited executed the cycle of “a circular pattern of purported trades – characteristics which are highly suggestive of financial crime.”
The financial institution also failed to identify the concerns of the illicit activities and allowed the arranging of withholding of tax reclaims in Denmark and Belgium.
“TJM executed trading to the value of approximately £59 billion in Danish equities and £20 billion in Belgian equities and received a commission of £1.4 million, which was a significant proportion of the firm’s revenue in the period,” the FCA stated in its official statement last on 15 July.
The firm was also charged as it failed to identify or escalate the potential financial crime concerns and threats imposed by other instances related to Solo Group business. This included the transactions with no visible economic reasons except to move the substantial windfall profits of €4.3 million amongst its clients.
The FCA mentioned that it has issued the organisation a penalty of £2,038,700 after repeated breaches. This is the largest fine so far and this is the third case brought by the Financial Conduct Authority in relation to cum-ex trading.
Mark Steward, the Executive Director of Enforcement and Market Oversights, stated: “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.”
The regulator mentioned the investigation process has involved proactive engagement with law enforcement firms and compliance partners across the globe.