The share broker ordered to pay $900,000
Online share brokering firm Tiger Brokers (NZ) Limited has been ordered to pay $900,000 for multiple breaches of the Anti-Money Laundering and Countering Financing of Terrorism Act.
Following a formal warning issued to Tiger Brokers in April 2020, the Financial Markets Authority (FMA) commenced an investigation.
The FMA brought proceedings against the fintech in relation to its AML/CFT processes, including failures around due diligence, reporting and record-keeping.
The FMA case rested on four causes of action, that Tiger Brokers admitted to, including:
- Failing to conduct customer due diligence (including standard, enhanced and additional customer due diligence on certain clients);
- Failing to terminate an existing business relationship with any customer where it was unable to conduct customer due diligence;
- Failing to report suspicious activities; and
- Failing to keep records in accordance with the Act’s requirements.
Between April 2019 and January 2020, approximately NZ$60.8 million was transacted through New Zealand’s financial system without proper checks and controls in place, the FMA said.
The FMA said that Tiger’s customer due diligence and record-keeping breaches were significant - the former extended to at least 3,768 customers, the regulator said.
The company’s record-keeping breaches were representative of its weak compliance approach across its business, the FMA said, which in the 2019-2020 AML/CFT reporting year, comprised between 69,705 and 126,230 customers and transactions to a gross total value between $3.6bn and $35.2bn.
In a judgement at the Auckland High Court, Justice Gault said: “Part 2 of the Act plays an important role in New Zealand’s regulatory landscape. Its purposes are to detect and deter money laundering and the financing of terrorism; maintain and enhance New Zealand’s international reputation; and to contribute to public confidence in the financial system.”
FMA head of enforcement Margot Gatland (pictured above) said that the judgment reinforced the importance of these laws in maintaining the integrity of New Zealand’s financial markets.
“The court found Tiger Brokers failed to appropriately vet customers, respond to activities that should have raised concerns, and maintain records in the manner required by the Act. These are all core obligations for an AML/CFT-reporting entity,” Gatland said.
“This case demonstrates that the FMA can and will use a wide range of tools to deal with a firm’s approach to compliance, both to stop immediate harm continuing, and where the misconduct is serious, take stronger enforcement action through the courts.
Failure to keep records, as required by the AML/CFT Act, severely hampers the FMA’s ability to monitor compliance and ensure the regime is effective,” Gatland said.
“New Zealand-based AML/CFT reporting entities cannot outsource compliance obligations to third parties or rely on parent companies overseas without ensuring that they meet compliance obligations under New Zealand law,” she said.
Tiger Brokers is the New Zealand-based subsidiary of Tiger Fintech (Singapore) PTE Limited and provides share brokering services through an online trading platform, Tiger Trade.
