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Investment firm fined for failing to carry out checks on 6,000 clients

An investment firm has been fined €133,000 for failing to carry out anti-money laundering checks on 6,000 customers. 

The Financial Intelligence and Analysis Unit (FIAU) said in a public notice that Trive Financial Services Limited had acquired over 6,000 customers transferred to it by a foreign institution.  

According to the notice, the company failed to show the FIAU any evidence that it had carried out the necessary checks to ensure that the foreign institution’s anti-money laundering checks on these customers were in line with the requirements under local legislation. 

The company also failed to show the FIAU that it had examined a sample of the 6,000 customers to check that everything was in order. 

While the company claimed that it carried out the necessary checks whenever a customer sought to transfer funds, the FIAU said its review of the customer files confirmed otherwise. 

“Indeed, in a number of instances no review of the customer’s identification documents, or proof of address had been logged, even if the company accepted or transferred funds on the customer’s behalf or else allowed customers to withdraw funds,” the FIAU said. 

The FIAU said Trive Financial Services had also shown an “inability” to understand its business risks and carry out the necessary mitigating measures needed to prevent financial crime.  Furthermore, the company failed to update its business risk assessment to factor in the 6,000 new customers it acquired from the foreign firm.  Failures were similarly noted in the company’s efforts to identify the origins of their clients’ funds and wealth. 

The company also did not have sufficiently robust measures to ensure that it can effectively monitor transactions carried out for and on behalf of its customers, the FIAU said. 

As a result of the failures identified, Trive Financial Services agreed on a remediation plan with the FIAU to improve its compliance with anti-money laundering legislation. 

The FIAU said the company could face further penalties if it failed to implement this plan by the stipulated deadline. Last month, a court declared that administrative penalties imposed by the FIAU are unconstitutional and in breach of rights to be tried by an independent court. 

The court judgment is expected to be appealed.

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