The United Kingdom’s Financial Conduct Authority (FCA) has slapped a fine of little more than £2 million on The TJM Partnership Limited, which was put into liquidation earlier this year. The penalty came as a part of the regulator’s investigation against cum-ex trading.
The company was blamed for its failure to maintain effective systems and controls for identifying and preventing financial crimes and money laundering .
TJM executed trades on behalf of the clients of Solo Group between January 2014 and November 2015. These were a circular pattern of purported trades, which are often used for financial crimes. And, indeed, the trading activities were carried out to withhold tax reclaims in Denmark and Belgium.
“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,” said Mark Steward, FCA’s Executive Director of Enforcement and Market Oversight.
Additionally, the regulator has detailed that TJM executed trading worth around £59 billion in Danish equities and £20 billion in Belgian equities. Moreover, the company received a commission of £1.4 million in total from the illicit trades.
Many Irregularities
Further, TJM failed to identify and escalate financial crime concerns in two separate instances involving Solo Group: one of them was the transfer of windfall profits of €4.3 million to clients; the other one was, TJM received accepted third-party payments without any due diligence.
The investigation was a part of cum-ex trading scam, which was a tax fraud scheme that surfaced in 2017. The latest penalty was the third case brought by the FCA related to that and was the largest monetary penalty.
Last month, the British regulator penalized Ghana International Bank with a monetary fine of £5.8 million.
