Mr Prodhan has referred this Decision Notice to the Upper Tribunal (the Tribunal) where he and the FCA will each present their cases. The Tribunal will determine what, if any, is the appropriate action for the FCA to take, and will remit the matter to the FCA with such directions as the Tribunal considers appropriate for giving effect to its determination. The Tribunal’s decision will be made public on the Upper Tribunal website(link is external). Accordingly, the proposed action outlined in the decision notice will have no effect pending the determination of the case by the Tribunal.
The Decision Notice, which reflects the FCA’s view of what occurred, outlines the reasons for the FCA’s decision to fine Mr Prodhan £76,400 for acting without due skill, care and diligence and for being knowingly concerned in a breach by SBUK of its obligations to maintain effective anti-money laundering (AML) systems.
Mr Prodhan was the senior manager at SBUK with responsibility for the establishment and maintenance of effective AML systems and controls. In the FCA’s view, between 7 June 2012 and 4 March 2014, Mr Prodhan failed to take reasonable steps to assess and mitigate the AML risks arising from a culture of non-compliance among SBUK’s staff. The FCA considers that he failed to ensure that sufficient focus was given to AML systems and controls within SBUK or that there was a clear allocation of responsibilities to oversee SBUK’s branches, and that he failed to appropriately oversee, manage and adequately resource SBUK’s Money Laundering Reporting Officer (MLRO) function.
The FCA considers that, because of these failings, SBUK’s operational staff failed to appreciate the need to comply with AML requirements and the MLRO function was ineffective in monitoring their compliance. This led to systemic failures in SBUK’s AML systems and controls throughout the business.
In October 2016, the FCA took action against SBUK and its former MLRO, Steven Smith.