JLT Specialty fined £1.8m for lack of corruption checks

The FCA has fined JLT Specialty over £1.8m for failing to make appropriate checks to guard against the risk of bribery and corruption when making payments to overseas third parties.

The broker and risk consultant was found to have failed to conduct proper due diligence before entering into relationships with overseas introducers – partners in other countries who helped them secure new business.

In addition, it “did not adequately assess” the potential risk of new business secured through its existing overseas introducers.

The failures occurred between 19 February 2009 and 9 May 2012 and breached the FCA’s principle on management and control.

During this period, JLT Specialty received almost £20.7m in gross commission from business provided by overseas introducers, and paid them more than £11.7m in return.

The firm’s penalty was increased because of its failure to respond “adequately” to the warnings the FCA had given to the industry generally or to JLT Specialty specifically.

Following the firm’s agreement to settle at an early stage of the investigation, it qualifies for a 30% reduction on the original penalty of £2.6m to £1.8m.

FCA director of enforcement and financial crime Tracey McDermott said: “These failings are unacceptable given JLTSL actually had the checks in place to manage risk, but didn’t use them effectively, despite being warned by the FCA that they needed to up their game. Businesses can be profitable, but firms must ensure that they take the necessary steps to control the risks in that business.

“Bribery and corruption from overseas payments is an issue we expect all firms to do everything they can to tackle. Firms cannot be complacent about their controls – when we take enforcement action we expect the industry to sit up and take notice.”

JLT said in a statement: “The FCA has confirmed that it has found no evidence to suggest that JLTSL permitted any illicit payment or inducement to any such third party during the period, nor that JLTSL intended to permit any such payment to be made.

“Further, the FCA recognised that JLTSL made significant efforts in the relevant period to improve its systems and controls framework.

“JLTSL has since put in place updated policies that have been confirmed by the FCA as being appropriate.”