Today's business and finance round up 14th December 2021
💰Natwest fined £265m for laundering drug gang cash
14th December 2021
Bite-sized business news from the UK and beyond
Good morning Chocolatier Tony’s Chocolonely has apologised after owners of its advent calendars were left disappointed last Wednesday after discovering there was nothing behind the window that day. Kids were reportedly reduced to “floods of tears”.
It turns out it wasn’t a production error but in fact a deliberate action to highlight the inequality in the chocolate industry with the next day’s window having two chocolates.
- Natwest fined £265m for laundering drug gang cash
- Purplebricks left red-faced by multimillion pound blunder
Natwest fined £265m for laundering drug gang cash
What’s going on?
Natwest has been fined £265m by the financial regulator after the high street bank pleaded guilty to failing to stop money laundering by suspected criminal gangs.
Why is this important?
By law all financial firms have to follow strict rules to ensure they don’t help criminals turn their ill-gotten gains into legitimate funds.
Natwest failed to spot some blatant red flags of this sort of activity for years with a string of customers.
A court heard that a Bradford jeweller, that was suspected as a front for a drug gang, deposited over £200m in cash at 50 branches during a period of five years. That's despite having less than £20m in revenue.
Cash would arrive in black bin bags with branch managers running out of room to store it in safes but no alarm was raised. It was only after a police raid that the jeweller was shutdown.
Natwest is still 55% owned by the state following its taxpayer bailout during the financial crisis. So facilitating money laundering is doubly embarrassing for the government.
The bank said it “deeply regretted” its failures. It has invested £700m in preventing financial crime and has another £1bn planned until 2026.
Purplebricks left red-faced by multimillion pound blunder
Shares in online estate agency Purplebricks tumbled 21% after it revealed it could be forced to pay millions in compensation to tenants of its landlords.
It stems from an apparent blunder in its lettings management business that could cost the company up to £9m.
By law tenants are supposed to be notified with legal documents on how their rental deposit would be protected under government backed schemes within 30 days of paying.
Failure to do this means that tenants can claim up to three times the value of the deposit. Purplebricks has allegedly been uncompliant with this rule since it was founded in 2012.
The company said it would delay the release of its half-year results, which had been due next week, to get more clarity on how bad the situation is.
The costly error comes just weeks after it warned that profits would be hit by more challenging market conditions as the supply of new properties on market dries up.
Purplebricks has failed to live up to the hype of an online disruptor to the estate agent industry. After going public in 2015 the company reached a peak valuation of £1.4bn but is now worth less than £80m.
Stat of the day
A record £4bn was spent making TV shows in the UK in the past year - almost double the figure before the pandemic
Other stories to keep you in the loop
- Bank of England orders lenders to put money into rainy day fund
- Wetherspoons warns of profit hit as new COVID measures bite
- FCA hires law firms and headhunters as staff vacancies mount
- Sports Direct owner launches £70m share buyback scheme
- Goldman Sachs asks UK staff to return to working from home
- Turkey faces threat of financial crisis after lira plunges against dollar
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