FSA issues huge fraud penalty warning

The FSA says BNPP Private Bank had such weak controls that a worker was able to steal £1.4m from clients’ accounts. The bank failed to have an effective review process for large transactions, and its procedures were not clear about the role of senior management in checking significant transfers prior to payment. On top of that, a flaw in the bank's IT system allowed a senior employee to evade the normal Middle Office processes. It meant basic authorisation and signatory checks were not carried out on internal cash transfers between different customer accounts. The unnamed senior empl...