Investment firm penalized £86,800 for creating considerable danger for investors

The Jersey Financial Services Commission (JFSC) has issued a fine of £86,803 against Garfield Bennett Trust Company Limited (GBTCL) in July 2022. The trust company was found to have neglected, remedied, and material breaches of Jersey regulations, specifically in relation to five Jersey Private Funds (JPFs) between October 2020 and March 2022.

Kerry Petulla, the Commission's Executive Director of Enforcement, Intelligence, and Financial Crime, stated that the penalty was levied against GBTCL due to the regulatory breaches identified. The trust company was found to have failed to implement appropriate and adequate controls to protect investors, and to have not adequately managed conflicts and high-risk factors presented in the funds.

Moreover, the JFSC found that GBTCL failed to adequately understand, document, monitor, and mitigate financial crime risks for the JPFs. These failures exposed Jersey to significant risks of financial crime through Jersey-based structures and posed an unacceptable risk to the reputation and stability of Jersey's financial services industry.

The failures left GBTCL vulnerable to significant financial crime risks and exposed investors to significant risk of financial loss. GBTCL acknowledged the issues that occurred between 2020 and 2022 as highlighted by the JFSC and has completed remediation of the shortcomings.

In response to the findings, GBTCL has invested in its systems and controls and has strengthened its Board. The trust company also stated that no investors suffered any loss in relation to the Funds concerned. GBTCL intends to grow the business and welcomes the opportunity to conclude this matter by way of early settlement.

Kerry Petulla urged all financial services businesses operating in Jersey to review the findings and ensure compliance with the regulatory framework. The Board of GBTCL was found to not have relevant experience in JPFs during the period of the infringements.

It's important to note that the specific board members of GBTCL from October 2020 to March 2022, during which the institution was sanctioned, are not publicly detailed in available sources.

The fine was a 'civil financial penalty' and GBTCL agreed to settle with the JFSC. These failures have the potential to undermine the integrity and stability of Jersey's financial services industry, and the JFSC's actions serve as a reminder of the importance of regulatory compliance in the industry.