FCA censures CACEIS UK; firm to pay £31.7m to WealthTek clients

The Financial Conduct Authority (FCA) has censured CACEIS UK, with the asset servicing bank to make a £31.7m voluntary payment to WealthTek clients for failing to act on information that left them exposed to financial crime risk.

WealthTek was a wealth management firm, previously known as Vertus Asset Management, that was regulated by the FCA from January 2020 to April 2023, when the regulator ordered the firm to cease operations and appoint special administrators.

Former WealthTek principal partner, John Dance, has been charged with nine criminal offences, including multiple counts of fraud and money laundering, which he has pleaded not guilty to.

His trial has been scheduled for September 2027 at Southwark Crown Court.

CACEIS UK became WealthTek's sub-custodian in November 2020, assuming responsibility for keeping its clients’ assets safe.

The FCA noted that, on three occasions, CACEIS UK checked the Financial Services Register, which showed that WealthTek was not authorised to hold certain client assets, but did not take ‘sufficient action’.

CACEIS UK also did not identify that WealthTek was not allowed to hold client money, and opened client accounts for WealthTek to use.

It then did not monitor these accounts properly by not promptly reviewing and resolving alerts raised by their system, the FCA added.

CACEIS UK co-operated with the FCA and agreed to make a voluntary ex-gratia payment of £31,714,068 for the benefit of WealthTek’s clients, of which WealthTek’s administrators will receive £30.9m and the Financial Services Compensation Scheme (FSCS) will receive £800,000.

The FSCS will make distributions of any surplus to WealthTek’s FSCS-eligible clients once it has concluded any further recovery actions.

This co-operation and voluntary payment meant CACEIS UK avoided being subject to a financial penalty from the FCA of £23,091,000, after a 30 per cent discount for agreeing to settle the matter.

The FCA has now secured over £57m in payments for WealthTek clients, with action taken against CACEIS UK, Sapia Partners and Barclays Bank UK.

“Strong financial crime controls keep clients’ assets safe,” said FCA joint executive director of enforcement and market oversight, Therese Chambers.

“CACEIS UK’s failures exposed clients to serious risk. The firm chose to do the right thing with extensive co-operation and agreeing to a substantial voluntary payment, and we decided not to impose a fine as a result.”

---