Financial institutions

Over $5 billion in fines imposed on financial institutions worldwide

Financial institutions were fined a combined $5.4bn (€4.7bn) last year, with Irish stockbroker Davy among those fined.

New figures from Irish fintech Fenergo show enforcement actions totaled $5.4 billion for failing to comply with anti-money laundering (AML) and data privacy regulations.

This is almost half of the $10.6 billion taken a year earlier, although it includes a $698 million settlement stemming from the 1Malaysia Development Berhad scandal.

Notable enforcement actions in 2021 included the €1.8 billion levied on Swiss bank UBCS by a French court. Last month, the bank filed an appeal with the Supreme Court of France against a decision of a Paris court which upheld the conviction for money laundering, while reducing the fine by 4.5 billion. euros imposed in a previous trial.

In the United States, regulators imposed $673.2 million in enforcement actions on foreign banks, including a $100 million fine on the UAE’s oldest private bank, Mashreqbank, for illegally processing more $4 billion in Sudan-related payments.

Closer to home, Davy was hit with a 4.1 million euro fine by the Central Bank in connection with a bond deal where a group of 16 employees, including senior executives, sought to achieve a profit without informing the customer or the company’s own compliance officers.

This fine was significantly higher than the 1.7 million euros imposed on Bank of Ireland a year earlier for breaching MiFID regulations.

The total volume of fines imposed on financial institutions for compliance failures was around 176, compared to 760 in the same period the previous year. The average value of fines for anti-money laundering compliance violations was $34.4 million.

The sharp increase in the value of financial sanctions by region occurred in Europe, the Middle East and Africa, where fines rose from just over $1 billion to $3.4 billion in 2021 .

Crypto companies

There has been an increase in the number of non-bank financial companies targeted by regulators in the past year, with crypto firms BitMEX and BitPay in particular being fined a combined $100 million for failing to meet their obligations. in money laundering.

Employees of financial institutions also continued to face regulatory scrutiny, with 16 people fined $16.5 million for their role in anti-money laundering compliance violations. silver.

Bahrain’s High Criminal Court has fined six Future Bank employees $2.7 million each for their role in the biggest money laundering case to date in Bahrain’s history. ‘State.

Data privacy fines for financial institutions fell 82% last year to just $17.4 million. The majority of fines were for GDPR violations in Europe.