CACEIS UK will make a £31.7 mn voluntary payment to WealthTek clients after the Financial Conduct Authority censured the asset servicing bank for failures linked to client asset protection and financial crime controls, according to Beinsure.
The FCA said CACEIS UK failed to act properly on information showing WealthTek lacked authorisation to hold certain client assets.
The regulator has now secured more than £57 mn for WealthTek clients within just over a year through action involving CACEIS UK, Sapia Partners and Barclays Bank UK.
CACEIS UK became WealthTek’s sub-custodian in November 2020, when WealthTek operated under the name Vertus Asset Management LLP. As sub-custodian, CACEIS UK had responsibility for safeguarding client assets.
The FCA found CACEIS UK checked the Financial Services Register on three occasions. Those checks showed WealthTek did not have permission to hold certain client assets, but CACEIS UK did not take sufficient action.
The bank also failed to identify that WealthTek lacked permission to hold client money. It still opened client accounts for WealthTek and then failed to monitor those accounts properly, including by not promptly reviewing and resolving alerts generated by its systems.
Therese Chambers, joint executive director of enforcement and market oversight at the FCA, said strong financial crime controls protect client assets. She said CACEIS UK’s failures exposed clients to serious risk.
The FCA did not impose a financial penalty because CACEIS UK cooperated extensively and agreed to make the voluntary payment. Without that cooperation and the £31.7 mn ex-gratia payment, the regulator said it would have imposed a £23.1 mn fine after settlement discount.
According to Beinsure, the payment will go to WealthTek clients who have not recovered their money in full. WealthTek’s administrators will receive £30.9 mn, while the Financial Services Compensation Scheme will receive £800k to support recovery processes under its statutory duties.
The FCA concluded its CACEIS UK investigation in 13 months, presenting the case as evidence of faster enforcement work.
The regulator took action against WealthTek in April 2023, ordering the firm to cease operations and appoint special administrators. WealthTek had been regulated by the FCA since January 2020.
In December 2024, the FCA separately charged WealthTek’s former principal partner, John Dance, with several criminal offences, including fraud and money laundering. A trial has been scheduled for September 2027 at Southwark Crown Court.
The FCA previously fined Barclays Bank UK £3.1 mn for poor handling of financial crime risks linked to a WealthTek client money account. Barclays also agreed to make a £6.3 mn voluntary payment for WealthTek clients facing shortfalls.
Sapia Partners also agreed to make a £19.6 mn voluntary payment to WealthTek clients with unrecovered shortfalls. The FCA censured the firm as part of the same wider WealthTek-related enforcement work.
