NatWest’s £365m laundering trial to ‘hurt bank’s name’

NatWest faces ‘significant’ damage to its reputation this week as it becomes the first bank to appear in court on criminal charges over money laundering, lawyers say. 

It has been slammed by the City watchdog for its role in an alleged £365million scandal, and its legal team will appear at Westminster Magistrates Court on Wednesday when it is expected that the case will be sent to the Crown Court. 

NatWest might also be asked how it intends to plead. 

A sign of things to come: NatWest has been slammed by the City watchdog for its role in an alleged £365million scandal

The state-backed bank has been accused of failing to properly monitor large sums deposited in the account of a customer, believed to be gold dealership Fowler Oldfield. 

The firm is alleged to have deposited £365million – £264million in cash – in ‘increasingly large’ sums from November 2011 to October 2016. Experts said more than five million laundered notes were deposited into the account. The dealership was shut down after a police raid in 2016. Twelve people were arrested and charged with money laundering offences. 

The Financial Conduct Authority investigated the case for four years. It alleges NatWest failed to conduct proper due diligence and monitoring of its dealings with customers to prevent money laundering. NatWest’s bankers could be quizzed in court over what systems it had in place to prevent criminality. 

Nicola O’Connor, director at Bird & Bird law firm, said the bank faced ‘significant’ reputational damage over the claims. 

The charges come after chief executive Alison Rose changed the bank’s name from RBS to NatWest last year to rebuild its reputation in the wake of the financial crisis. 

Experts said the FCA was ‘flexing its muscles’ by bringing criminal charges instead of levying NatWest with a fine – signalling a tougher stance by the regulator under its new chief executive Nikhil Rathi. He was previously chief executive of the London Stock Exchange. 

Sarah Crowther, partner at law firm DAC Beachcroft, said the case could indicate regulators were willing to go after individual bankers if fines did not work. 

She added: ‘The FCA has sent a clear message that it has taken its fight to the next level. 

‘Perhaps it has come to the conclusion that imposing ever increasing fines on faceless corporations does little to deter the people who, whether willingly or unwittingly, allow financial institutions to be used to launder money. 

‘In pursuing criminal proceedings, a warning is delivered to the individuals that the possibility of criminal sanctions applies to the cogs, as well as the wheel.’ 

NatWest and the FCA declined to comment.

This post first appeared on Dailymail.co.uk