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Risk and Compliance

Financial service entities, as well as businesses more generally, have seen a tightening of their regulatory framework in recent years. They now operate in a world of increased regulation and are more than ever subject to the risks and various costs of non-compliance.

Regulators and criminal prosecutors both home and abroad are equipped with a more powerful arsenal of offences and fines with which to manage markets. They are now taking their powers more seriously and enforcing civil and criminal regulation as never before. Attention on banks and corporations has been particularly intensified, with a focus on the activities of senior officers, directors, and outside advisors.

Honeycomb sees itself as having two key roles in this area:

Firstly, we assist financial services and other entities to maintain compliance and to manage risks of non-compliance.

Secondly, when an acute episode of non-compliance arises or is suspected, we assist with the investigation of the circumstances, identify what has gone wrong, correct the position and put the systems in place best designed to minimise any reoccurrence.

Case Studies in Risk and Compliance

Bank Tax Whistleblowing

Following a whistle blowing disclosure at the London branch of a major foreign bank relating to non-compliance with UK tax provisions, financial reporting requirements, banking codes of practice and FCA and Bank of England regulations, we were engaged to review the Bank’s internal systems and processes, the fitness of senior staff, training and compliance with risk and other regulations. Our review and investigation into transactions at the bank showed that there had been false accounting in relation to the reporting of income from swap transactions, deception of the Inland Revenue in relation to the presentation of items of expenditure, and non-compliance with banking code and FCA regulations in relation to non-compliance with bad debt and loan provisioning policies. We were able to assist the bank through the reporting procedures and making good with its processes, correcting the accounts and working with regulators to rebuild trust and compliance.

Regulated Professional Firm Fraud

Following the detection of a fraud within a regulated professional firm involving loss of client monies, we were tasked with investigating the fraud and the system failures which allowed it to take place, and rebuilding these so as to minimise the chance of something similar happening again. We performed a comprehensive review of systems of control and compliance with client money and other regulations, prepared a report for the regulator and worked with the client and the regulator to mend the faults in the system, and rebuild the integrity of the business and the trust of the regulator and clients. The task involved us in a further two years of ongoing review and audit of the firm’s compliance.

For further reading:

•   Expert Witness Work •  Investigations •  Financial Crime  •  Data Analytics  •  Information and Intelligence Gathering