CACEIS UK censured and ordered to pay £31.7m over WealthTek financial crime failures
The FCA has publicly censured CACEIS UK after the sub-custodian failed to act on three Register checks showing its client was not authorised to hold certain assets. Total recoveries for WealthTek clients now exceed £57m.
Verdict: Worth reviewing if you operate in custody, sub-custody, or any role where you onboard and monitor regulated counterparties.
CACEIS UK, the Credit Agricole-owned asset servicing bank, has been publicly censured by the FCA (Final Notice) and will make a voluntary payment of £31,714,068 to clients of collapsed investment firm WealthTek. The core failure is straightforward: CACEIS UK checked the Financial Services Register three times, found each time that WealthTek was not authorised to hold certain client assets, and took no sufficient action on any of those checks.
The firm also failed to spot that WealthTek was not permitted to hold client money at all, yet went on to open client accounts for it and then failed to monitor those accounts properly by not promptly reviewing and resolving system alerts. The FCA found breaches of Principle 2 of its Principles for Businesses (due skill, care and diligence). It also breached SYSC 6.1.1R, 6.3.1R and 6.3.3R (the Senior Management Arrangements, Systems and Controls sourcebook rules on financial crime systems and controls) and regulations 18, 27 and 28 of the Money Laundering Regulations 2017.
No fine was imposed. Had CACEIS UK not co-operated and settled, the FCA would have imposed a financial penalty of £23,091,000 (after a 30% early-settlement discount). The voluntary payment of £31.7m exceeds that figure, with £30.9m going to WealthTek's administrators and £800,000 to the Financial Services Compensation Scheme (FSCS), which will pursue further recoveries before distributing any surplus to eligible clients.
CAECIS UK became WealthTek's sub-custodian in November 2020, when the firm was still trading as Vertus Asset Management LLP. The FCA concluded its investigation in 13 months, within its stated operational objective of closing investigations within 16 months or less.
This action brings the total recovered for WealthTek clients to over £57m in just over a year, across three separate enforcement actions. Barclays Bank UK was fined £3,093,600 and agreed a further voluntary payment of £6,281,757. Sapia Partners LLP was censured and agreed a voluntary payment of £19,637,950.
WealthTek's principal partner, John Dance, was separately charged in December 2024 with nine criminal offences including alleged fraud and money laundering between 2014 and 2023. His trial is scheduled for September 2027 at Southwark Crown Court.
The FCA has now pursued three separate firms in the WealthTek ecosystem: a sub-custodian, a counterparty bank, and an investment manager, not just the individual at the centre of the alleged fraud. Checking the Register and logging the result was not enough; firms are expected to act on what those checks reveal.
