CACEIS UK, an asset servicing bank, has been censured by the FCA and will make a £31.7m voluntary payment to WealthTek clients for failing to act on information that left clients exposed to the risk of financial crime.
The FCA has now secured over £57m in total for WealthTek clients in just over a year, with action taken against CACEIS UK, Sapia Partners and Barclays Bank UK.
CACEIS UK became WealthTek's sub-custodian in November 2020, meaning they were responsible for keeping its client’s assets safe. WealthTek was then known as Vertus Asset Management LLP.
On three occasions, CACEIS UK checked the Financial Services Register which showed that WealthTek wasn’t authorised to hold certain client assets but did not take sufficient action. The firm also did not spot that WealthTek was not allowed to hold client money. However, it went on to open client accounts for WealthTek to use, then failed to monitor those accounts properly by not promptly reviewing and resolving alerts raised by their system.
Therese Chambers, joint executive director of enforcement and market oversight at the FCA, said:
'Strong financial crime controls keep clients’ assets safe. CACEIS UK’s failures exposed clients to serious risk.
'The firm chose to do the right thing with extensive co-operation and agreeing to a substantial voluntary payment, and we decided not to impose a fine as a result.'
The voluntary payment will be distributed to WealthTek clients who have not been able to reclaim their money in full.
The FCA concluded its investigation in 13 months. This is an example of how it is improving the pace of its investigations.
Notes to editors
- Final Notice: CACEIS UK (PDF)[1].
- In November 2020, CACEIS Bank S.A. merged with KAS Bank N.V.
- WealthTek LLP was regulated by the FCA from 28 January 2020 until 4 April 2023 when the FCA took action to order the firm to cease operations[2] and to appoint Special Administrators. Clients can see updates from WealthTek’s administrators here[3].
- Were it not for CACEIS UK’s co-operation and its agreement to make a voluntary ex-gratia payment of £31,714,068 for the benefit of WealthTek’s clients, the Authority would have imposed a financial penalty of £23,091,000 (after a 30% discount for agreeing to settle the matter).
- Of the £31.7m, WealthTek’s administrators will receive £30.9m, and the Financial Services Compensation Scheme (FSCS) will receive £800,000 (in accordance with its statutory duties to pursue recoveries where reasonably possible and cost effective). Once the FSCS has concluded any further recovery actions, it will proceed to make distributions of any surplus to WealthTek’s FSCS eligible clients, under the rules set out in the Compensation Sourcebook of the FCA’s Handbook.
- In December 2024[4], the FCA separately charged WealthTek’s principal partner with multiple criminal offences, including fraud and money laundering.
- A trial has been scheduled[5] for September 2027 at Southwark Crown Court in the criminal proceedings brought by the FCA against John Dance, the former principal partner of WealthTek LLP.
- The FCA fined Barclays Bank UK PLC[6] £3,093,600 for poor handling of financial crime risks in relation to a client money account opened by WealthTek. Barclays also agreed to make a voluntary payment of £6,281,757 for distribution to WealthTek’s clients who have a shortfall in the money they have been able to reclaim.
- Sapia Partners LLP agreed to make a voluntary payment of £19,637,950[7] for distribution to WealthTek clients who have a shortfall in the money they have been able to reclaim, and the FCA has censured the firm.
- Find out more information about the FCA[8].