In what the headline writers are calling a “landmark case”, an MLRO and the firm she worked for in Jersey have been acquitted of failing to make suspicious activity reports when they should have done. (“Landmark” because it was the first prosecution – rather than civil action – and not because of the acquittal.) You can read something of the case here, although I have yet to find the court transcript – please do share if you have the link.
However, I was more interested to read that, a week after her acquittal, MLRO Michelle Jardine had been banned from working in the regulated sector by the Jersey Financial Services Commission. In that cold-blooded way I have, I leapt on this information because it all helps to define the expectations (or at least the JFSC’s expectations) of the role of the MLRO. For those of you unfamiliar with this particular Channel Island, let me explain that under Jersey legislation there are two separate roles: Money Laundering Compliance Officer (responsible for monitoring compliance with AML legislation) and Money Laundering Reporting Officer (responsible for receiving and considering SARs – suspicious activity reports). Both roles can be held by the same person, as indeed they were by Mrs Jardine when she worked for wealth management firm STM Fiduciare Limited. So what went wrong?
Looking at the JFSC’s Public Statement, we find that in her role as MLRO, Mrs Jardine failed to process fifteen SARs – some of them nearly two years old. And in her role as MLCO, she failed to pass on to the Board full information about the status of internal and external reporting of suspicions (perhaps unsurprising in the circumstances). So she failed at the very core of the job: listening to what your staff tell you of their concerns about money laundering, and passing on information to the authorities for investigation. Quite what she thought she was signing up to when she agreed to be MLRO and MLCO, I cannot imagine, but this case (both the criminal acquittal and the regulatory withdrawal of approval) underlines the importance of making sure that MLROs are fully aware of the duties for which they are legally responsible.