Broker warned over anti-money laundering law breach

Craigs Investment Partners has received a formal warning from the Financial Markets Authority. Photo/Joel Ford

One of the country's largest broking firm has been handed a formal warning by the regulator after it breached anti-money laundering laws.

Craigs Investment Partners, which has 16 offices around the country with 120 investment advisers, reached a settlement agreement with the Financial Markets Authority after admitting it breached the law.

The company was found to have failed to undertake adequate due diligence on a client and then did not terminate its relationship with the client when it was unable to complete the required level of information gathering.

Anti-money laundering legislation came in to force in New Zealand from June 30, 2013.

In a statement the FMA said in its view Craigs Investment Partners had deficiencies in its compliance programme following the introduction of the new law.

It believed the firm did not have a cohesive process for escalating, monitoring and managing anti-money laundering or countering financing of terrorism issues and ensuring compliance of the law.

"Craigs had not maintained sufficient written records in relation to the due diligence process," it said in the statement.

However the regulator also acknowledged since 2014 Craigs had taken steps to improve its compliance with the law and had introduced a range of initiatives which would reduce the chance of a future breach.

As part of the settlement agreement Craigs has agreed to appoint an independent party to identify any further areas that may assist with the continued improvement of its compliance programme and to follow up on those recommendations as soon as possible.