LONDON - The bank used by Great Britain's queen, Coutts, has been hit with a record fine by regulators for failing to monitor whether money it was handling was the proceeds of crime.
An investigation by Britain’s Financial Services Authority found the institution neither controlled its relationships with new customers, nor did it monitor existing relationships.
Daily Telegraph reported that the bank failed
The FSA imposed a fine of $13.8 million (8.75 million pounds), the highest ever issued for such failures.
"The failings at Coutts were serious, systemic and were allowed to persist for almost three years," it said in a statement posted on its web site. "They resulted in an unacceptable risk of Coutts handling the proceeds of crime."
It said the fine would have been even higher but the bank qualified for a 30 per cent discount for early payment.
Coutts is part of the Royal Bank of Scotland Group, which is 82-per-cent-owned by the British taxpayer following a 2008 rescue bailout.
The Daily Telegraph said the bank offers free current accounts to customers who invest at least $400,000 (250,000 pounds).
Coutts' parent company said it had not found any evidence that money laundering took place.
In a statement, Rory Tapner, chief executive of the wealth division of Royal Bank of Scotland, said: "Since the FSA first raised its concerns, we have implemented a number of improvements to prevent any recurrence of these failings. Regulatory reforms continue apace. We remain committed to ensuring that our systems and controls are robust and counter the risk of financial crime in all the markets in which we operate."
More from msnbc.com and NBC News:
- Bomb plot foiled: Cache of suicide vests found in Afghan defense ministry
- In Brazil, 'Gang of Blondes' kidnapped women, emptied their bank accounts
- Strauss-Kahn hit with preliminary sex-ring charges
- Syria responds to Annan's peace proposal; Homs shelled again
- Expert: Al-Qaida web forums crippled in suspected cyber-attack
Follow us on Twitter: @msnbc_world
