Fides Corporate Services Limited, Mr David Charles Housley Whitworth, Mr Paul Conway and Mr Stuart Turner (2024-03-05)

Summary

This is a public enforcement statement issued by the Guernsey Financial Services Commission (GFSC) against Fides Corporate Services Limited and three of its directors following an investigation into serious and systemic AML/CFT and corporate governance failures. It records penalties, prohibitions and exemption disapplications imposed on 28 February 2024 after breaches spanning many years were found in nearly all client files reviewed.

• Financial penalties: £140,000 imposed on Fides Corporate Services Limited, £70,000 on Mr Whitworth, £35,000 on Mr Conway and £21,000 on Mr Turner under section 39 of the Enforcement Powers Law.
• Prohibition orders: Mr Whitworth prohibited from holding a supervised role for 3 years and 6 months; Mr Conway prohibited for 2 years and 10 months, under section 33 of the Enforcement Powers Law.
• Exemption disapplication: Notices issued under section 32 disapplying the exemption in section 3(1)(g) of the Fiduciaries Law for Mr Whitworth and Mr Conway, each for 3 years and 6 months.
• Findings: Failures identified include inadequate or absent relationship risk assessments, deficient customer due diligence and beneficial ownership identification, failure to conduct enhanced due diligence on high-risk and PEP relationships, ineffective introducer due diligence, weak transaction monitoring, ineffective board oversight and compliance review, and unmanaged conflicts of interest (including acceptance of client shares by directors).
• Basis: The Commission concluded the Licensee and directors failed to meet the Minimum Criteria for Licensing under Schedule 1 of the Fiduciaries Law and breached AML/CFT Regulations, Schedule 3, the Handbook, the Code of Corporate Governance and the Principles of Conduct.

The statement is a completed enforcement outcome rather than a document creating new ongoing compliance requirements for other firms, though it illustrates the standards GFSC expects around risk assessment, CDD, ECDD, monitoring, governance and conflicts of interest for fiduciary licensees.

Key obligations

• Fides Corporate Services Limited must pay a £140,000 financial penalty imposed under section 39 of the Enforcement Powers Law
• Mr Whitworth must pay a £70,000 financial penalty and is prohibited from holding a supervised role for 3 years and 6 months from 28 February 2024
• Mr Conway must pay a £35,000 financial penalty and is prohibited from holding a supervised role for 2 years and 10 months from 28 February 2024
• Mr Turner must pay a £21,000 financial penalty
• Mr Whitworth and Mr Conway are subject to disapplication of the section 3(1)(g) Fiduciaries Law exemption for 3 years and 6 months from 28 February 2024

Applies to

fiduciary licensees, trust and company service providers, company directors, compliance officers, MLROs/MLCOs

Deadlines

• 28 February 2024: Date the Commission's decisions (penalties, prohibition orders, exemption disapplication notices and public statement) took effect
• 3 years and 6 months from 28 February 2024: Duration of Mr Whitworth's prohibition from holding a supervised role and of the disapplication of the section 3(1)(g) exemption for Mr Whitworth and Mr Conway
• 2 years and 10 months from 28 February 2024: Duration of Mr Conway's prohibition from holding a supervised role