Hurricanes sponsor Fullerton Markets has been issued with a formal warning by the Financial Markets Authority (FMA) under anti-money laundering rules.
The regulator says an inspection of the Wellington-based forex firm showed the company did not have in place adequate risk assessment or anti-money laundering and counter financing of terrorism programmes.
The firm has been a Hurricanes sponsor since 2016, in a deal which features the Fullerton name on the rugby team's jersey.
The company claims its chief executive Mario Singh is "one of Asia's top thinkers and influencers in the online trading industry." Mr Singh posted photos of himself with Bill English on social media in 2016, captioned "up close and personal with the new Prime Minister."
The FMA also says Fullerton has not carried out customer due diligence in line with the Amended Identity Verification Code of Practice.
“Fullerton failed to take reasonable steps to fully identify clients who are a politically exposed person, as required under section 26 of the AML/CFT Act. A politically exposed person is an individual who has been entrusted with a prominent public function, whether in New Zealand or abroad,” the regulator says.
The warning means Fullerton has to undertake a serious of compliance actions set out by the regulator by January 1 next year. If the company fails to do so it could get fined $2 million for every offence once a civil action is taken.
FMA director of regulation Liam Mason says the act came into force in June 2013 and many firms had invested significantly to comply with the law.
“It’s not fair on those who have made this effort if others do not do so. The FMA signalled in our last annual report that we would take formal action where we see firms failing to meet these requirements.”
The forex firm released a statement this afternoon saying it takes compliance "most seriously" and that it continues to "work actively" to comply with the law.
New Zealand-based director Gerald Carter said in a statement: “We will continue to work actively and constructively with the FMA to address all the issues they have raised to ensure that Fullerton is fully compliant.”
A spokesman for the Hurricanes says the rugby outfit had found out about the warning at the same time that media did. The club is still trying to work out what the FMA's censure means and talking with stakeholders, he adds.
Earlier this week, the director of Ping An, Xiaolan Xiao, went to court to challenge a $5.3 million penalty for multiple breaches of the Anti-Money Laundering Act.
It was the first such case to hit the courts under the 2009 legislation.
Out of 1588 transactions totalling $105 million for which Ping An failed to keep records or identify customers, there were 173 with clear indicators of suspicious transactions, the High Court at Auckland found in September.
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