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FCA ISSUE $9.7 million for alleged financial crimes, including bribery.

23/06/2022

The U.K.’s Financial Conduct Authority said Wednesday that it fined insurance broker JLT Specialty Ltd. about £7.9 million, equivalent to about $9.7 million, for alleged financial crimes, including bribery.

U.K.-based JLT Specialty is now part of New York-based professional-services firm Marsh & McLennan Cos., which acquired its parent company, Jardine Lloyd Thompson Group PLC, in 2019.

The FCA said JLT Specialty had failed to manage its business and risks effectively, allowing more than $3 million in bribes to be paid to foreign government officials in one instance.

A Marsh & McLennan spokesman said in an email:

  • “This matter relates to a former employee of JLT who pleaded guilty to charges arising from actions that took place in Ecuador from 2014 to 2016, prior to the acquisition of JLT in 2019,”

  • “JLT voluntarily reported this matter to law enforcement authorities. As previously disclosed, we have cooperated fully with the investigation by the FCA and are pleased to put this matter behind us.”

The FCA acknowledged JLT Specialty’s self-reporting of the issues and considered the company’s assistance in the investigation, including providing access to materials from JLT’s internal investigation, in deciding the penalty amount.

JLT Specialty had placed business in London’s reinsurance market on behalf of JLT Re Colombia, another Jardine Lloyd Thompson subsidiary. The business had been introduced by a third party based in Panama.

Between 2013 and 2017, JLT Specialty allegedly paid $12.3 million in commission to the parent company of the Colombian unit, which paid $10.8 million to the third party in Panama, the FCA said.

In turn, the Panama entity then paid more than $3 million in bribes to government officials at a state-owned insurer to help win and retain business for JLT Specialty and JLT Re Colombia, according to the U.K. regulator.

The FCA previously fined JLT Specialty approximately £1.9 million in 2013 for what it called similar risk-control failures concerning overseas introducers.

The regulator said at the time that the company didn’t conduct proper due diligence before entering into relationships with overseas partners, helping JLT secure business.

https://www.wsj.com/articles/u-k-regulator-fines-jlt-specialty-9-7-million-for-bribery-11655927888

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