GFSC issue x2 fines totaling £236,810.00 [@30th December 2022]

The GFSC has published its decision to impose a financial penalty of

1. £203,000 on Crescendo Advisors International Limited (the "Licensee" or the "Firm")
2. £33,810  on Mr. Hamish Jebb Hamilton Few ("Mr. Few") 

BACKGROUND

The Licensee

1. Was incorporated in Guernsey in December 2008
2. iIs licensed under the POI Law 2020 to carry on the restricted activities of Promotion, Dealing, Advising, and Management for both
   • Category 1 Collective Investment Schemes and
   • Category 2 General Securities and Derivatives.
3. The Licensee is part of the Crescendo group of companies, established and majority owned by Mr Giacomo Jacques Diwan. Mr Diwan is not a resident of Guernsey.
   • From its incorporation in Guernsey in 2008 until July 2017, the Licensee
   • It was administered at different times by three locally based service providers who each provided Compliance Officers and Money Laundering Reporting Officers ("MLROs") to the Firm.
   • Since then [July 2017],
     1. It has operated as a standalone licensee with a physical presence in Guernsey and
     2. Has outsourced its compliance function.

Mr Few

4. Mr Few was involved in the administration and oversight of the Licensee's day-to-day business throughout his employment with the three different administrators from 2008 until August 2015, when he left the Firm's then administrator.
   • He joined the Firm's final administrator in July 2016,
   • He was appointed Senior Manager of the Firm in December 2016 and
   • He has been Managing Director since January 2018.
   • He has acted as the Firm's MLRO since March 2019.

Activities

5. The Firm provides discretionary investment management services to private clients and non-Guernsey collective investment schemes.
6. Its clients comprise high-net-worth individuals from or linked to jurisdictions that pose a higher risk of money laundering, terrorist financing and/or bribery and corruption.

Crescendo Advisors International Limited – remediation - 2016

7. The Firm put into place a Risk Mitigation Programme at the end of 2016 following the identification by the Firm's then administrators of anti-money laundering/countering of financing of terrorism ("AML/CFT") deficiencies in 90% of its client files (90% of which were classified as high risk).
8. The Firm undertook a remediation project which was reported to have been completed by November 2017.

GFSC investigation 2019

9. The GFSC investigation into the Licensee commenced at the end of 2019 following an on-site visit to the Firm in August 2019 as part of the Commission's Thematic Review of the Source of Funds/Source of Wealth in the Private Wealth Management sector.
10. This was the Licensee's first visit by the Commission.

Findings

11. The Licensee failed to properly conduct relationship risk assessments, taking into account relevant high-risk factors and to review relationship risk assessments regularly
12. The Licensee failed to understand the ownership and control structure of a customer and identify PEPs
13. The Licensee failed to monitor transactions and activity
14. The Licensee failed to ensure appropriate and effective AML/CFT policies, procedures and controls
15. Corporate governance failings
16. The Licensee failed to avoid, manage or minimise conflicts of interest

Aggravating factors

17. The Licensee's business was inherently high-risk, with 90% of its clients rated high-risk.
    • There were adverse media on several of the Licensee's clients, which signposted the significantly heightened risk of the Licensee handling the proceeds of crime.
18. The Licensee failed to ensure that it had adequate policies, procedures and controls in place, as required by regulation,
    • Resulting in the Licensee being vulnerable to being used to facilitate money laundering and terrorist financing and
    • Thereby jeopardising the reputation of Bailiwick as an international finance centre.
19. The Failings
    • Were found to have occurred from the time of the take-on of business relationships, including not completing risk assessments and failing to undertake sufficient EDD on high-risk business relationships, and
    • These were not remediated during periodic reviews.
20. The Commission relied on assurances from the Board of the Licensee in relation to the completion of the remediation project in 2017, which were inaccurate.
21. The deficiencies in the Firm's corporate governance strategy were brought to the attention of the Board by Mr. Few in 2018, but these were not effectively addressed.

Read the GFSC public statement

• https://www.gfsc.gg/news/crescendo-advisors-international-limited-mr-hamish-jebb-hamilton-few