GFSC defeats appeal by former boss of trust firm
THE Guernsey Financial Services Commission has successfully defended a Royal Court appeal against a fine and prohibition order from the former managing director of the local office of a global trust firm.
Just weeks after it lost an appeal in court in what could go on to be seen as a landmark case over enforcement action, the commission saw Trevor Kelham, well-known CEO and managing director of Standard Chartered Trust (Guernsey), fail with an appeal against a four-year ban and £45,000 fine.
Mr Kelham was CEO and managing director of the company from September 2012 to May 2017.
Standard Chartered Trust, which announced it was pulling out of Guernsey in 2016 and was eventually wound up in June 2020, was also fined £140,000 in 2020 over the same matters.
The GFSC acted with regard to failings on checking client due diligence on inter-group transfers into Guernsey, and a failure to identify and manage risks in relation to transfers and terminations of trust arrangements worth more than $1.4bn.
It said the actions exposed the island to the risk of ‘severe reputational damage’.
Delays in addressing due diligence on the client transfers into Guernsey meant it was unknown whether some $590m. of client assets might involve money laundering, terrorist financing or other financial crime.
The second set of transfers and terminations saw $1.4bn. of client assets leave Guernsey, including at least $265m. which was declared in a tax amnesty in its new jurisdiction, without proper procedures and controls.
The commission said that Mr Kelham, who now lives in the United States, and co-accused Sarah-Jayne Sarre, former director of Standard Chartered from 2015 to 2020, who had a spell as head of compliance at the firm and two spells as money laundering reporting officer, had given insufficient regard as to whether these funds involved tax evasion or were the proceeds of other financial crime. Ms Sarre, who did not contest the sanctions against her, was fined £13,500.
Deputy Bailiff Jessica Roland heard the appeal. She concluded: ‘It cannot be said to be irrational, unreasonable, or disproportionate for the GFSC to exercise its powers to impose the sanctions contained in the decision.’
