Yet another fine for KPMG in latest audit rules breach
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Audit giant KPMG has been hit with another £5m fine after failing to identify that bank BNY Mellon was mixing £1 trillion of clients’ savings with its own funds, contrary to rules and leaving customers exposed to the risk of losses.
The fine means KPMG has paid £21m since June 2018, following a string of blunders at Co-op Bank, insurer Quindell, motorcycle insurer Equity Red Star and fashion firm Ted Baker. However, its annual revenue was £2.3bn last year.
KPMG and the Financial Reporting Council declined to comment on the case.
However, the FRC said at a tribunal hearing in May that KPMG had “defeated” the British regulatory system by signing off on the BNY Mellon reports between 2007 and 2011 that failed to comply with rules on safeguarding client assets during the financial crisis.
The FRC wanted to charge KPMG a record £12.5m for signing off on the bogus documents, but lawyers for the ‘Big Four’ firm successfully argued at a tribunal that this was unfairly high.
It has now been cut to £5m after a hearing.
BNY Mellon was itself fined a record £126m by the FCA in 2015 for failing to comply with rules that required it to properly ringfence customer accounts at its London branch and in its international unit between 2007 and 2013.
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