asset managers warned fsa corruption probe

Law firm Dechert LLP has warned asset managers of the FSA’s imminent thematic review focusing on corruption.

asset managers warned fsa corruption probe


A bulletin by the group pointed out that 22 asset management houses have already been earmarked for review by the regulator. The review will cover bribery and corruption, sanctions and money laundering.

“If the findings of the FSA’s thematic review into asset managers identify as many weaknesses into anti bribery and corruption compliance as the thematic review into investment banks earlier this year, asset managers should be very cautious of any future enforcement action,” the firm said.

When the FSA carried out its thematic review of bribery and corruption compliance in investment banks, it identified a number of weaknesses, including failure to carry out adequate anti-bribery and corruption risk assessments, poor management information and failure to carry out specific anti-bribery and corruption audits.

The watchdog has also said banks seemed to employ an inadequate level of enhanced due diligence in high risk situations and appeared to take unacceptable money laundering risks where potentially profitable relationships were concerned, according to Dechert. 

Furthermore, the group noted that several institutions have recently been hit with enforcement action for failing to implement effective systems and controls to manage sanctions risk. The size of the fines applied in this action also seems to be increasing.

Dechert warned: “All of these issues should be of concern to the asset management sector, particularly as a result of the FSA’s recent enforcement track record against the banks. Some of the breaches upon which the FSA has relied in order to take this action could apply equally to asset managers.”

The FSA’s report on the upcoming review is due to be published in the third quarter of 2013.



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