British financial watchdog has slammed a £10M on Banque Havilland S.A., a Luxembourg-headquartered private bank, for allegedly creating and disseminating a document which contained ‘improper advice’ for potential clients. The UK Financial Conduct Authority (FCA) also imposed separate fines on three former employees of the bank's London branch.
FCA Takes Action against Bank and Ex-employees
According to FCA, the ex-staff members include Edmund Rowland, David Weller and Vladimir Bolelyy, who are former CEO, Senior Manager and employee, respectively of the bank’s London branch. The regulator fined them £352,000, £54,000 and £14,200, respectively. It also banned them from working in financial services in the UK.
FCA’s latest action comes after an October 2021 warning notice the regulator issued to Banque Havilland SA and ‘certain individuals’ previously employed by the private bank with regards to a breach of its principles for businesses.
In the notice, the British regulator accused Banque Havilland of being the mastermind of a document that “set out a number of steps which could be taken to harm the economy of Qatar by using manipulative trading practices aimed at creating a false, or misleading, impression as to the market in or the price of Qatari bonds.”
FCA Alleges Scheme to Devalue Qatari Riyal
In a statement released on Friday, FCA noted that it believes that the goal of Banque Havilland with the document was to devalue the Qatari Riyal and break its peg to the US dollar in order to hurt the economy of the Middle East country.
The financial markets supervisor noted that the document was created by Bolelyy on the order of Rowland and with significant contribution from Weller. It further noted that Rowland and Bolelyy distributed the document, including by providing a copy to a representative of an Abu Dhabi sovereign wealth fund.
“Banque Havilland intended to present the document to representatives of countries it considered might have reasons to want to put economic pressure on Qatar, including the United Arab Emirates, as a way of marketing its services,” FCA explained.
However, the British watchdog noted that it has not found evidence that the strategy mentioned in the document was executed. It described the strategy as ‘manipulative trading’ that could have been a criminal offence if done in the UK.
“Banque Havilland’s conduct actively encouraged the commission of financial crime, providing ideas for manipulative trading to someone it saw as having the political motivation to be potentially interested in such ideas,” said Therese Chambers, Executive Director of Enforcement and Market Oversight at the FCA. “It barely needs stating, but such conduct is completely unacceptable.”
However, the regulator pointed out that its decision with regards to the fines has been referred to the Upper Tribunal, a superior appellate court in the UK, by Banque Havilland, Rowland and Bolelyy.
Meanwhile, the British watchdog has continued its crackdown on cryptocurrency ATMs in the country. It recently took action against such sites in Exeter, Nottingham, and Sheffield, thereby expanding its earlier crackdown against such facilities in East London.
This article was written by Solomon Oladipupo at www.financemagnates.com.