CACEIS UK Censured Over WealthTek Financial Crime Controls

The Financial Conduct Authority (FCA) has censured CACEIS UK, an asset servicing bank, and secured a voluntary payment of £31.7m for clients of WealthTek LLP after the firm failed to act on clear indications that client assets were exposed to financial crime risk.

CACEIS UK became WealthTek's sub-custodian in November 2020, when the firm was still trading as Vertus Asset Management LLP, taking on responsibility for safeguarding client assets. On three separate occasions the bank consulted the Financial Services Register, which showed that WealthTek lacked permission to hold certain client assets, yet took no adequate action. It also failed to identify that WealthTek was not authorised to hold client money. Despite this, CACEIS UK opened client accounts for WealthTek's use and then failed to monitor them properly, neglecting to review and resolve alerts generated by its own systems in a timely manner.

The control weaknesses are instructive. The failures sit not in the absence of monitoring infrastructure but in the firm's inability to act on the intelligence it already held — both the negative results of permission checks and the alerts its systems were producing. Repeated Register checks that surface a permissions discrepancy should function as escalation triggers, particularly where a counterparty's authorisation scope is fundamental to the custody relationship. A monitoring system that generates alerts no one promptly adjudicates offers little protection, and the case underscores the supervisory expectation that detection and remediation operate as a continuous loop rather than a box-ticking exercise at onboarding.

The FCA declined to impose a financial penalty, citing CACEIS UK's extensive co-operation and its agreement to the voluntary payment. Absent that co-operation, the Authority indicated it would have imposed a fine of £23,091,000, reflecting a 30% settlement discount. Of the £31.7m, WealthTek's administrators will receive £30.9m and the Financial Services Compensation Scheme (FSCS) £800,000, with any surplus ultimately distributed to eligible clients.

The action forms part of a wider recovery effort. The FCA has now secured more than £57m for WealthTek clients within a little over a year, having also taken action against Sapia Partners LLP, which agreed a voluntary payment of £19,637,950 and was censured, and Barclays Bank UK PLC, fined £3,093,600 with a further voluntary payment of £6,281,757. Separately, WealthTek's former principal partner, John Dance, faces multiple criminal charges including fraud and money laundering, with trial scheduled for September 2027 at Southwark Crown Court. The regulator concluded its investigation in 13 months, which it presents as evidence of an improving pace in enforcement.

Read the press release here.