Coutts fined for failings in money laundering controls
Private bank Coutts has been fined £8.75m by the Financial Services Authority (FSA) for not taking adequate measures to prevent money laundering.
The FSA said the failings "resulted in an unacceptable risk of Coutts handling the proceeds of crime".
The findings related to high-risk people, especially those whose political positions meant they were vulnerable to corruption.
Coutts clients include the Queen, pop stars and sports personalities.
It is owned by Royal Bank of Scotland.
Coutts agreed to settle at an early stage in the process. It said it was confident that its anti-money laundering processes were now robust.
"Since the FSA first raised its concerns, we have implemented a number of improvements to prevent any recurrence of these failings," said Rory Tapner, chief executive of the wealth division of Royal Bank of Scotland.
"We remain committed to ensuring that our systems and controls are robust and counter the risk of financial crime in all the markets in which we operate."
The fine followed the FSA's visit to Coutts in October 2010 as part of its review into how banks were managing situations in which there was a high risk of money laundering.
The regulator said that Coutts had failed to check the source of funds when prospective new clients tried to open accounts.
It also failed to check up on any intelligence about its existing or prospective clients and had not kept information on those clients up to date.
The FSA said there had been deficiencies in nearly three quarters of high-risk customers' files.
"Coutts' failings were significant, widespread and unacceptable," said Tracey McDermott, the FSA's acting director of enforcement and financial crime.
"Its conduct fell well below the standards we expect and the size of the financial penalty demonstrates how seriously we view its failures."