SEI fined 900,200

In yet another massive fine for CASS breaches the FCA continues to apply pressure on firms that do not take CASS compliance seriously.  Over a prolonged period SEI failed to adequately protect client money and performed a non compliant reconciliation process without even realising it.  The stand out comment is the untrained member of staff adjusting a client money shortfall from £14 million to £932,000 because the shortfall was of an unprecedented amount and therefore must have been inaccurate.

Given the time period over which these breaches occurred and the amount of publicity surrounding client money including Dear CO and Dear CEO letters to the firm they really had nowhere to hide and the penalty was bound to be severe.

Some continue to argue that there was no client detriment and the FCA have been harsh but the basic understanding is that the FCA always consider the worst case scenario especially since the demise of Lehman's brothers and their view that if the worst happened then any client money must be clean and accurate to avoid any delays in returning it to its rightful owners - the clients of the firm.

Published: November 2013
By: Anthony Smith

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