Taiwan's Financial Supervisory Commission imposed an administrative fine of NT$8 million on Shin Kong Commercial Bank on 4 January 2024, citing the institution's failure to properly establish and implement internal controls for deposit and remittance procedures and the oversight of its wealth management personnel. The penalty was issued under Article 129, subparagraph 7 of the Banking Act for breaches of Article 45-1, paragraph 1 and of the implementation rules on internal control and audit systems of financial holding companies and banks, and follows a regulatory investigation into misconduct by a former employee within the bank's wealth management division who misappropriated funds belonging to customers.
The FSC found that a former wealth management supervisor at the bank had misappropriated funds belonging to clients and engaged in improper fund transactions with those customers. The regulator concluded that the bank's internal control framework had not been adequate to prevent or to promptly detect the misconduct, identifying specific deficiencies in the procedures governing deposit and remittance processes and in the mechanisms designed to monitor the conduct and activity of wealth managers who handle client assets.
FAILURES IN WEALTH MANAGER OVERSIGHT IDENTIFIED
The regulator found that Shin Kong Commercial Bank's monitoring mechanisms for its wealth management staff were insufficient.
PERIOD AND AMOUNTS INVOLVED
The FSC said the misconduct ran from August 2018 to December 2022, involved about NT$22.11 million belonging to two customers aged over 80, and called on financial institutions to strengthen internal controls and protect elderly customers. The enforcement action is recorded on the FSC's public disclosures platform.