Jersey-based trust company Lutea Holdings has agreed to settle with the island's regulator after "significant and material" compliance failings were uncovered.
An on-site examination of Lutea Holdings in 2019 by the Jersey Financial Services Commission was followed up with a full investigation in 2020, the regulator said in a statement in late December last year.
In a public statement, the JFSC said its investigation revealed that "between 2018 and 2021, Lutea failed to organise and control its affairs effectively for the proper performance of its business activities and did not operate adequate risk management systems".
It identified "systemic deficiencies in Lutea's corporate governance and internal systems and controls" which made the trust company vulnerable money laundering and terrorism risks.
As a result, the company was found to "pose an unacceptable risk to the integrity and stability of Jersey's financial services industry."
The JFSC's investigation concluded that the root of the problem lay with Lutea's board of directors.
According to the JFSC, the board "was ineffective, lacked awareness of regulatory requirements and engendered an organisational culture without due regard for compliance."
Kerry Petulla, executive director of enforcement for the JFSC, said: "The fight against financial crime is a priority for the JFSC.
"We expect businesses to maintain robust corporate governance arrangements and AML/CFT systems and controls.
"In this case, the Lutea board was found to be ineffective and failed to promote an internal culture of compliance."
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