FCA Censures CACEIS UK for Financial Crime Failures, Orders £31.7m Client Compensation

CACEIS UK has been censured by the FCA and will pay £31.7m to WealthTek clients after failing to prevent financial crime risks.

The Financial Conduct Authority (FCA) has taken action against CACEIS UK an asset servicing bank, for failing to protect clients from financial crime risks. The firm has agreed to make a voluntary payment of £31.7 million to WealthTek clients, who were exposed to significant risks due to CACEIS UK’s oversight.

This latest action is part of the FCA’s ongoing efforts to secure compensation for WealthTek clients, bringing the total recovered to over £57 million in just over a year. The FCA has also taken action against Sapia Partners and Barclays Bank UK in relation to the same case.

The Role of CACEIS UK and the Nature of the Failures

CACEIS UK became WealthTek’s sub-custodian in, taking on the responsibility of safeguarding the firm’s client assets. At that time, WealthTek was known as Vertus Asset Management LLP.

Despite checking the Financial Services Register on three occasions, CACEIS UK failed to take sufficient action when it discovered that WealthTek was not authorized to hold certain client assets.

The firm also overlooked the fact that WealthTek was not permitted to hold client money. Despite these red flags, CACEIS UK proceeded to open client accounts for WealthTek’s use. Furthermore, the firm failed to monitor these accounts properly, neglecting to promptly review and resolve alerts raised by their system.

The FCA’s Response and the Impact on Clients

Therese Chambers, joint executive director of enforcement and market oversight at the FCA, emphasized the importance of strong financial crime controls in protecting clients’ assets. She noted that CACEIS UK’s failures exposed clients to serious risks but commended the firm for its cooperation and agreement to make a substantial voluntary payment.

The voluntary payment of £31.7 million will be distributed to WealthTek clients who have not been able to reclaim their money in full. Of this amount, £30.9 million will go to WealthTek’s administrators, while £800,000 will be received by the Financial Services Compensation Scheme (FSCS). Once the FSCS concludes any further recovery actions, it will distribute any surplus to eligible clients.

Background and Related Actions

The FCA’s investigation into CACEIS UK was concluded in 13 months, demonstrating the regulator’s commitment to improving the pace of its investigations. The FCA has also taken action against other firms involved in the WealthTek case. In, the FCA charged WealthTek’s principal partner, John Dance, with multiple criminal offences, including fraud and money laundering. A trial has been scheduled for September 2027 at Southwark Crown Court.

The FCA fined Barclays Bank UK PLC £3,093,600 for poor handling of financial crime risks in relation to a client money account opened by WealthTek. Barclays also agreed to make a voluntary payment of £6,281,757 for distribution to WealthTek’s clients who have a shortfall in the money they have been able to reclaim. Sapia Partners LLP agreed to make a voluntary payment of £19,637,950 for distribution to WealthTek clients who have a shortfall in the money they have been able to reclaim, and the FCA has censured the firm.