Man­ulife says bank­ing unit was pe­nal­ized for ‘ad­min­is­tra­tive lapses’

The Hamilton Spectator - - BUSINESS - ALEKSANDRA SA­GAN

TORONTO — Man­ulife Fi­nan­cial has con­firmed that its bank­ing unit was pe­nal­ized last year af­ter Canada’s money-laun­der­ing watch­dog con­cluded it failed to re­port a sus­pi­cious trans­ac­tion and var­i­ous money trans­fers.

Last year, Fin­trac fined its bank­ing sub­sidiary $1.15 mil­lion, but it with­held the bank’s iden­tity, say­ing it was ex­er­cis­ing its dis­cre­tion to do so.

Man­ulife is­sued a state­ment Mon­day say­ing Man­ulife Bank was fined for “ad­min­is­tra­tive lapses.”

“Al­though we op­er­ate at the high­est eth­i­cal stan­dard, we are ca­pa­ble of ad­min­is­tra­tive er­rors. They were reme­died in the first half of 2014,” the com­pany said.

“There is no ev­i­dence to sug­gest that the ad­min­is­tra­tive re­port­ing vi­o­la­tions were con­nected to any fi­nan­cial mis­con­duct.”

The state­ment came af­ter the CBC, cit­ing anony­mous sources, iden­ti­fied Man­ulife Bank as the fi­nan­cial in­sti­tu­tion fined by Fin­trac last year.

Ex­perts spec­u­lated Fin­trac’s de­ci­sion to not name Man­ulife Bank could have come from an agree­ment whereby Man­ulife agreed not to pur­sue an ap­peal and pay the $1,154,670 fine in ex­change for anonymity.

Nei­ther Fin­trac nor Man­ulife have con­firmed such a deal took place.

The of­fice of Fi­nance Min­is­ter Bill Morneau de­ferred com­ment to Fin­trac, which did not im­me­di­ately re­spond to re­quests for com­ment.

It’s likely Fin­trac had such an agree­ment and felt a sig­nif­i­cant fine would be enough to sat­isfy the Cana­dian pub­lic, said Chris­tine Duhaime, a lawyer at Duhaime Law, a firm that spe­cial­izes in counter-ter­ror­ist-fi­nanc­ing and anti-money-laun­der­ing law prac­tice.

How­ever, there was sig­nif­i­cant back­lash as the pub­lic felt grant­ing a large cor­po­ra­tion anonymity — some­thing an av­er­age Joe wouldn’t be en­ti­tled to — wasn’t fair, she said.

The pub­lic needs to know who the en­tity be­hind such a large fine is, Duhaime said, adding she be­lieves Fin­trac won’t grant anonymity like this again if a sim­i­lar mat­ter comes up.

As a bank’s rep­u­ta­tion is im­por­tant to them, Duhaime said de­ter­rents like nam­ing them for wrong­do­ings can be ef­fec­tive.

“I think ev­ery­body prob­a­bly learned a good les­son here about trans­parency and ac­count­abil­ity to the Cana­dian pub­lic.”

Man­ulife said in its state­ment that it did not en­able or fa­cil­i­tate money laun­der­ing.

“One vi­o­la­tion in­volved a cus­tomer who had al­ready been re­ported to law en­force­ment and Fin­trac by Man­ulife. Ad­di­tional in­for­ma­tion re­leased by Fin­trac in 2016 shows that Man­ulife proac­tively worked with law en­force­ment in both Canada and the United States in re­la­tion to the mat­ter un­der­ly­ing the one sus­pi­cious trans­ac­tion re­port (STR) vi­o­la­tion, in­clud­ing advising law en­force­ment prior to the fail­ure to file this one STR.”

Man­ulife, one of the coun­try’s big­gest fi­nan­cial ser­vices busi­nesses, said it con­sid­ers the mat­ter closed and doesn’t plan fur­ther com­ment.

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