Last updated on February 29, 2020
Good news for the financial industry and retail investors. On February 11, the FCA-licensed e-money institution ePayments System has been ordered by the FCA to suspend all activity for “an indefinite period.” The regulator found “a number of weaknesses” in its anti-money-laundering (AML) controls. ePayments Systems is one of the big e-money institutions in the UK with over a million private accounts and more than 1,000 business accounts. Allegedly, the company has issued more than 75,000 prepaid cards as a principal issuer of Mastercard. It booked profits of more than £18m on revenues of almost £28m in the year up to the end of April 2019, with a whopping 66% gross profit margin according to Alphaville. Its director Robert Courtneidge resigned on February 17, 2020.
EFRI Complaints and crowdsourced financial intelligence
As a matter of fact, the UK-registered ePayments Systems Limited is not a stand-alone FinTech. The company is actually part of a group of international payment processors and/or FinTechs which is controlled by a group of people around the British lawyer Robert Courtneidge.
A few months ago our European Funds Recovery Initiative (EFRI) submitted a comprehensive report on Robert Courtneidge and his FCA-licensed companies – Moorwand Ltd and ePayments Systems Limited – to the UK regulator. The complaint was grounded on the extensive FinTelegram Research and thus on the many whistleblowers and damaged retail investors that provided their information. The complaint was actually the result of crowdsourced financial intelligence. While we do not know if and to what extent the EFRI complaint finally led to the FCA actions, EFRI has been reassured by the FCA that the complaint will be thoroughly dealt with.
The UK licensed lawyer Robert Courtneidge and his companies are heavily involved in the binary options and scam brokerage industry. As licensed payment service providers, the companies under Courtneidge’s leadership have accepted dozens of broker scams as merchants and processed payments for them. Courtneidge was also involved in the collapsed Danish bank KBH Andelskasse. The authorities are currently investigating this bank on suspicion of money laundering. The bank was apparently under the control of the people around Robert Courtneidge and Moorwand Ltd.
Only the beginning
In February 2020, the FCA finally took action and at least suspended the activities of the regulated ePayment Systems and froze the accounts. Robert Courtneidge resigned as director of the company with effect from 17 February 2020. The FCA’s action is absolutely good news for all investors who have lost money with Courtneidge’s customers and his payment processors. Not only is it a strong signal to the market. Moreover, it may enable the regulator to follow the money trail and try to recover the stolen funds for the defrauded retail investors.
Should FinTelegram’s well-documented suspicions be confirmed and Robert Courtneidge and his companies have neglected KYC/AML activities, then he and his companies involved would also be personally liable.
ePayments System is hopefully only the starting point to clean the payment processor and FinTech segment from bad actors. FinTelegram and EFRI will continue to expose bad FinTech actors to the regulators in the very best interest of retail investors and good FinTechs.