CACEIS UK agrees voluntary £31.7 million payment over WealthTek client asset failures

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CACEIS UK WealthTek settlement

Highlights

CACEIS UK will make a voluntary payment of £31.7 million after failing to safeguard WealthTek client assets and ignoring FCA warnings.
Most of the £31.7 million payment will compensate WealthTek clients, lifting total compensation for customers to more than £57 million across related cases.
If CACEIS UK hadn't voluntarily paid, the FCA would have imposed a £23.1 million fine after settlement discount, underscoring tough regulatory scrutiny.

Settlement terms and regulatory findings

As reported by the Financial Conduct Authority, CACEIS UK has agreed to make a voluntary payment of £31.7 million instead of facing a financial penalty over its role in safeguarding WealthTek client assets. The regulator says the bank ignored warnings on its register that WealthTek was not authorised to hold client funds, and then failed to monitor the accounts properly or act on alerts raised by its own systems.

The bank, the asset-servicing arm of France's Crédit Agricole, had acted as sub-custodian for WealthTek before the wealth manager collapsed into administration in 2023 amid fraud allegations. The FCA says that if CACEIS UK had not offered the payment, it would have imposed a fine of £23.1 million after a 30 per cent settlement discount.

Most of the £31.7 million will be distributed to WealthTek clients who have not yet recovered their money in full. Therese Chambers, joint executive director of enforcement and market oversight at the FCA, says strong financial crime controls keep clients' assets safe and that CACEIS UK's failures exposed customers to serious risk.

Broader compensation effort and fraud case

The latest payment takes the total compensation for WealthTek customers to more than £57 million. Barclays agreed last year to pay £6.3 million over its role in opening a client account for the wealth manager, while Sapia Partners paid £19.6 million this year after allowing WealthTek to operate as its appointed representative before the firm obtained its own licence in 2020.

Separately, WealthTek founder John Dance is facing nine criminal charges brought by the FCA, including multiple counts of fraud and money laundering. The watchdog alleges he used £64 million of client money taken from the firm between 2014 and 2023 to finance purchases including prizewinning racehorses and a Newcastle nightclub; he has pleaded not guilty, and a trial is set for September 2027.

The FCA has previously estimated that 84 per cent of WealthTek clients, including those from its earlier trading names Vertus Asset Management and Malloch Melville, would be fully compensated. CACEIS UK did not respond to a request for comment.

Our earlier article on the collapse of Market Financial Solutions (MFS) described how major banks became exposed to the lender before it failed under £1.8 billion in debt, triggering scrutiny of governance and controls. We noted that the FCA opened an investigation into MFS after court filings alleged fund misappropriation by founder Paresh Raja, highlighting how weaknesses in oversight can leave institutions and customers facing serious losses.

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