The Financial Supervisory Commission (FSC) has fined Cathay United Bank (國泰世華銀行) NT$12 million (US$420,949) over lapses in its internal controls after an employee stole NT$17.32 million from four clients, the commission told a news conference in New Taipei City on Tuesday.
A customer relationship manager surnamed Hong (洪) at a Cathay United branch in New Taipei’s City’s Banqiao District (板橋) from March 2016 to March took advantage of his clients’ trust to pocket their cash, the commission said.
The clients told Hong the passwords to their online banking accounts and he secretly terminated their insurance policies and collected the refunds, Banking Bureau Deputy Director-General Lin Chih-chi (林志吉) said.
Photo: Wu Chi-lun, Taipei Times
Hong transferred most of the stolen money to accounts of his family members, although he also put some into the clients’ accounts with notes saying that the cash was bonuses or yields to mislead them into believing that their investments were ongoing, Lin said.
Hong’s actions were revealed when one of the clients checked his account activity at the branch, and an employee saw the notes and said that they were strange, Lin said.
The FSC found that Cathay United failed to set up solid internal controls and did not implement risk management controls, he said.
For example, when the insurance policies of Hong’s clients were terminated, the bank should have confirmed with the clients that they intended to cancel the products, Lin said.
Hong’s manager should have checked whether he filed documents correctly, but the manager was not careful enough, which gave Hong a chance to illegally transfer money, Lin said.
The FSC barred the branch from providing bancassurance or investment funds for new clients for a month, it said.
For the year to date, the FSC has fined five banks over staff stealing a combined NT$336 million from clients, it said.
The fines totaled NT$72 million, it said.
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