Latest news with #financialRegulation
Times
03-08-2025
- Business
- Times
City watchdog ‘ignored my warning about Ponzi scheme'
The City regulator is facing criticism for allegedly 'ignoring' a warning about an investment group that later collapsed owing thousands of people more than £200 million. The Financial Conduct Authority received a report that 79th Group was an alleged Ponzi scheme in November, more than four months before the failure of the business, which is now being investigated by City of London police. In an apparent echo of the regulator's widely criticised handling of the £237 million collapse of London Capital & Finance's 'mini bonds' investment scam, the FCA told a complainant that 79th Group 'lies outside our remit' as it 'does not regulate mini bonds'. • Former HMRC official was adviser to collapsed investment firm Mini bonds are a high-risk investment issued by a firm in exchange for a fixed rate of interest over a set period. Insolvency practitioners have estimated that 79th Group owes more than £200 million to about 3,700 people based in the UK and overseas. Some investors have life savings at risk, and the matter has been raised in parliament. A member of the public had warned the FCA — including Nikhil Rathi, its chief executive — in November. Communications then continued in December and January. 79th Group continued to trade until April when it began to fall into insolvency. • City regulator getting 'more whistleblowing reports than ever' The group continued to trade until April when it began to fall into insolvency. City of London police have said they are investigating a 'suspected widespread fraud' at 79th Group, which sold 'loan notes' to investors offering high returns via third-party brokers. It told investors that the loans were secured against valuable property developments including a £250 million holiday park in north Wales. The company has denied any wrongdoing. In February, police said four people had been arrested and that 'a large amount of cash, luxury watches and jewellery were found during searches of properties, all of which were seized'. The people arrested have been released on bail and inquiries are continuing. There have been no charges. 79th Group's board advisers included a former senior HM Revenue & Customs official, who has not been arrested. Almost all financial firms in the UK must be authorised or registered by the FCA; 79th Group was not registered or authorised. The regulator declined to answer questions about the case, including when it first received a warning about the firm. A spokesman said: 'We have sympathy with those who've lost money. As there is an ongoing police investigation we are limited in what we can say.' He said the regulator is engaging with City of London police, but noted: 'The firm is not authorised by us and the sale of these products was not regulated by us.' The FCA faced fierce criticism over its handling of the London Capital & Finance case, which was called the 'largest Ponzi scheme in British history' by a High Court judge last year. • NatWest faces questions over links to collapsed 79th Group Dame Elizabeth Gloster, a retired Court of Appeal judge, who issued an excoriating report into the LCF affair in 2020, concluded that the regulator's 'failure to scrutinise LCF's business and to intervene earlier cannot be excused or mitigated on the basis that LCF's bond business was [unregulated]'. LCF was FCA-authorised, but its mini-bond business was unregulated. The FCA has powers to tackle unregulated collective investment schemes like 79th Group. Last week, the regulator began High Court proceedings against a business called Concept Capital Group for allegedly running an unauthorised investment scheme that gathered £23 million in consumer investments in modular housing. Sir John Whittingdale, a veteran Conservative MP and former minister, has raised 79th Group's failure in parliament, as has Anna Sabine, a Lib Dem MP. Whittingdale asked the chancellor in July what 'assessment she has made of the adequacy of Financial Conduct Authority support for victims'. He also wrote to the FCA last month on behalf of a constituent, a retired NHS health worker who lives in Essex and invested 'life savings' of £75,000 with 79th Group. He told the regulator that he was advised that many of the investors were 'unsophisticated, retired first-time investors, some put their savings into a well-planned scam'. He said at least 16 MPs have so far been asked to help. Brian Corr, the FCA's head of market intervention in retail banking, replied: 'We are unable to provide details regarding further engagement or action we have taken with any of the firms mentioned by your constituent, due to legal and policy reasons.' NatWest, the main receiving bank for 79th Group funds, and other lenders are facing scrutiny over 79th Group payments. NatWest has declined to comment on the case. • Watchdog to ban borrowing to invest in cryptocurrencies Administrators from Grant Thornton have told 79th Group investors that 'we believe this is a Ponzi', the term for a fraudulent investment set up in which early investors are paid with money from later investors rather than legitimate business activities. The person who warned the FCA about the group told The Times: 'The FCA completely ignored the substance of my concerns last year. Sadly, my concerns have proved well-placed and enormous amounts of investors' money is at risk following 79th Group's collapse. 'If the FCA is warned about a major Ponzi scheme and does nothing, is it a lapse in judgment or evidence of a callous attitude towards protecting the public?'
Wall Street Journal
23-07-2025
- Business
- Wall Street Journal
Morgan Stanley's Screening of Wealth-Management Clients Draws More Scrutiny
Morgan Stanley MS -0.31%decrease; red down pointing triangle is being probed by the Financial Industry Regulatory Authority over whether the Wall Street giant properly vetted its clients for money-laundering risks. The probe by Wall Street's self-regulator focuses on the firm's clients, risk ranking and other practices from October 2021 through September 2024, according to people familiar with the matter. It adds to the possible fines Morgan Stanley is already facing from federal investigations into its anti-money-laundering practices.
Bloomberg
15-07-2025
- Business
- Bloomberg
Mexico Fined Financial Firms Targeted by US Over Drug Claims
Mexican regulators imposed 185 million pesos ($9.8 million) in fines last month on three firms that were targeted by the US Treasury for potentially aiding drug traffickers, according to government data. Intercam Banco SA and its brokerage were fined 92 million Mexican pesos for violations of anti-money laundering rules such as failing to have an automated registry of unusual activity or follow its own guidelines on high risk clients, according to newly released data in regulator CNBV's database of fines. CIBanco SA and its brokerage were fined nearly 67 million pesos, also under anti-money laundering rules, for failing to maintain records and processing inordinate amounts of US dollars in cash.
Yahoo
15-07-2025
- Business
- Yahoo
Singapore proposes to strip money launderers of directorships
By Weilun Soon (Bloomberg) — Singapore is considering stripping directorships from persons who have been convicted of money-laundering offences in the city state after a S$3-billion (US$2.34 billion) scandal that dented the Southeast Asian country's reputation as a global financial centre. The government is seeking feedback on such a proposal from the public as it contemplates changes to several legislations, including the Companies Act 1967, the Ministry of Finance and the Accounting and Corporate Regulatory Authority said in a request for public comments on Monday. Among the proposed changes is a suggestion to allow ACRA to share audit information with overseas audit regulators. The amendments aim to prevent misuses of companies for unlawful purposes as well as to safeguard shareholders' interests, the agencies said. The public can submit their comments until 31 July. The move is expected to strengthen Singapore's anti-money laundering regime after the the scandal that unfolded in 2023. The Monetary Authority of Singapore imposed composition penalties of S$27.5 million on nine financial firms, including Credit Suisse's Singapore branch and Citibank Singapore, for anti-money-laundering breaches. One of the suspects named in the case, Wang Junjie, was a director at several companies related to some of those arrested. Wang was charged in January with offences related to falsifying accounts and representations. More stories like this are available on ©2025 Bloomberg L.P.
Bloomberg
09-07-2025
- Business
- Bloomberg
South Africa's Financial Cop Beefs Up to Take Down Online Scams
South Africa's financial-markets regulator is ramping up its operations to combat an explosion in online scams. The Financial Sector Conduct Authority will spend 200 million rand ($11 million) over the next 18 months to build up the supervisory muscle to beef up monitoring and enforcement.
