Central Bank fines Wells Fargo €5.8m for reporting breaches
The Central Bank has fined a subsidiary of US financial services firm Wells Fargo €5.8m for “serious failings” in relation to its regulatory reporting and compliance.
The breaches include failure to accurately report the firm’s capital position and to comply with a requirement in relation to liquidity testing.
This is the second biggest fine ever imposed by the regulator, its largest being the penalty of €21m it brought on Permanent TSB over the tracker mortgage scandal earlier this year.
The breaches, which the firm admitted to, varied in duration from 1 January 2014 to 28 February 2019.
The Central Bank found “serious and systemic failings” in the firm’s regulatory reporting capability, relating to the following; failure to calculate and report accurately its capital position and failure to periodically monetise a sample of liquid assets, as required by legislation.
In addition, Wells Fargo admitted to weak governance arrangements including lack of robust board and senior management oversight.
The regulator also found that Wells Fargo had inadequate internal control mechanisms, including a failure to properly document processes and procedures.
The Central Bank determined that the appropriate fine was €8.4m, which was reduced by 30pc in accordance with the settlement discount scheme provided for in the Central Bank’s Administrative Sanctions Procedure.
Seána Cunningham, the Central Bank’s Director of Enforcement and Anti-Money Laundering, said: “Wells Fargo Bank International Unlimited Company’s serious failings are of concern to the Central Bank and indicate that there was a poor compliance culture as it pertained to regulatory reporting.”
“The financial penalty imposed by the Central Bank reflects the widespread systemic failures in this instance, and the importance of regulatory returns as a tool used by the Central Bank to supervise firms.”
A Wells Frago Spokesperson: “WFBI takes its regulatory obligations seriously and we are committed to complying fully with regulatory requirements.”
“These events concerned regulatory reporting and did not affect our customers. We have made significant improvements to our systems, processes and resources for regulatory reporting to the Central Bank of Ireland (CBI) since these events.”
“We have also integrated continuous review and improvement into how we operate to ensure that our regulatory reporting to the CBI continues to be complete, timely and accurate,” the spokesperson added.
Since 2006, Central Bank has made 131 settlements with firms under its Administrative Sanctions Procedure, bringing the total fines imposed by the regulator to over €96m.