Weak anti-fraud measures earn bank hefty fine...

The Financial Services Authority has fined the BNP Paribas bank £350,000 because of its ineffective anti-fraud measures. Read original article

Recently a senior employee at the bank transferred £1.3 million out of clients' accounts without permission.

According to the FSA, the bank did not have a review procedure for transactions over £10,000 from clients' accounts.

Margaret Cole, FSA director of enforcement, said: "BNP Paribas' failures exposed clients' accounts to the risk of fraud. This is unacceptable particularly with the overall increase in awareness around fraud and client money risks.

"Senior management must make sure their firms have robust systems and controls to reduce the risk of them being used to commit financial crime."

Other firms should take the action as a warning that the FSA is "stepping up its game" in this area and firms should as well, Ms Cole added.

The FSA warned the BNP Paribas in August 2002 that its methods needed improvement.

However, the bank took no steps towards changing the systems in place.

Meanwhile, the FSA recently found no evidence of mis-selling of the policies used to contract out of the State Second Pension (S2P) since 1988.

A three-year investigation of the quality controls and sales practices used by firms led the financial watchdog to conclude that there was no evidence of misdemeanours.