FCA Censures CACEIS UK and Secures £31.7 Million Payment for WealthTek Clients

The Financial Conduct Authority (FCA) has publicly censured CACEIS UK and secured a voluntary payment of £31.7 million for former WealthTek clients after identifying significant failures in the firm’s financial crime controls.

The latest action forms part of the FCA’s wider efforts to recover funds for affected investors. Combined with previous actions involving Sapia Partners and Barclays Bank UK, the regulator has now secured more than £57 million for WealthTek clients in just over a year.

CACEIS UK’s Role as WealthTek’s Sub-Custodian

CACEIS UK became the sub-custodian for WealthTek in November 2020, when the company was operating under the name Vertus Asset Management LLP. As sub-custodian, the firm was responsible for safeguarding client assets and maintaining appropriate oversight of accounts linked to WealthTek’s operations.

The FCA found that CACEIS UK failed to take adequate action despite receiving information that should have raised serious concerns about WealthTek’s regulatory permissions and activities.

Regulatory Warnings Were Missed

According to the FCA’s investigation, CACEIS UK checked the Financial Services Register on three separate occasions and identified that WealthTek was not authorised to hold certain client assets.

Despite these findings, the firm did not take sufficient steps to investigate or address the issue. The FCA also determined that CACEIS UK failed to identify that WealthTek lacked permission to hold client money.

Nevertheless, client accounts were opened and made available for WealthTek’s use.

Failures in Monitoring and Oversight

The regulator also identified weaknesses in the ongoing monitoring of WealthTek-related accounts.

CACEIS UK failed to review and resolve compliance alerts generated by its internal systems in a timely manner. These shortcomings reduced the effectiveness of the firm’s financial crime controls and increased the risk that client assets could be exposed to misconduct or financial crime.

FCA Recognises Cooperation

While the FCA found serious failings, it acknowledged that CACEIS UK fully cooperated throughout the investigation and took proactive steps to address the situation.

As a result, the regulator decided not to impose a financial penalty and instead issued a public censure while securing a substantial voluntary payment for affected clients.

Therese Chambers, Joint Executive Director of Enforcement and Market Oversight at the FCA, emphasized that strong financial crime controls play a critical role in protecting customer assets and maintaining trust in the financial system.

£31.7 Million to Be Returned to Clients

The voluntary payment of £31.7 million will be distributed to WealthTek clients who have not yet recovered the full value of their funds.

The payment represents a significant step toward compensating affected investors and reducing financial losses resulting from the firm’s failures.

Faster FCA Investigations Deliver Results

The FCA completed its investigation into CACEIS UK in just 13 months, highlighting the regulator’s ongoing efforts to improve the speed and efficiency of enforcement actions.

The case demonstrates the FCA’s commitment to holding firms accountable when they fail to maintain adequate controls while also encouraging cooperation and remediation where appropriate.

Why This Matters

This enforcement action sends a clear message to financial institutions that safeguarding client assets and maintaining effective financial crime controls are essential regulatory responsibilities. Firms that fail to act on warning signs or properly monitor client activity may face significant consequences, while investors can expect regulators to continue taking action to protect their interests.