2020-10-01
Wallter, UAB fined for improper client funds protection and provision of incorrect information
The Supervision Service of the Bank of Lithuania established that the electronic money institution Wallter, UAB held its client funds improperly and knowingly provided incorrect information to the Bank of Lithuania regarding balances of funds. For these infringements, the Supervision Service imposed a €90,000 fine on the institution.
“The company not only held client funds in an improper manner, but also concealed this fact by providing factually inaccurate information to the Bank of Lithuania. These are two serious legislative infringements. There never has been or will be tolerance for such cases. The Bank of Lithuania has, on numerous occasions, emphasised that protection of client funds must be a top priority. It would be naive, to say the least, to expect that specialists at the Bank of Lithuania will not notice erroneous data,” said Jekaterina Govina, Director of the Supervision Service of the Bank of Lithuania.
According to the Republic of Lithuania Law on Electronic Money and Electronic Money Institutions, an institution, having decided to safeguard client funds by way of segregation, must hold the funds with credit institutions registered in the Republic of Lithuania or another EU Member State or with the central bank of the Republic of Lithuania or another EU Member State, or invest them in secure and liquid low-risk assets. Wallter, UAB held some of its client funds with electronic money and payment institutions, some – in accounts opened in the name of other legal entities and accounts opened with banks that were not intended for safeguarding client funds, thus breaching the requirements laid down in the abovementioned law. Therefore, the Bank of Lithuania imposed a €30,000 fine on the institution.
The Supervision Service also established that, in its reports for 2019 and Q1 2020 and during the documentary supervision performed by the Bank of Lithuania, Wallter, UAB had provided incorrect information by failing to indicate all institutions and accounts in which its client funds were held and balances of these client funds. By submitting misleading data to the Bank of Lithuania, the company gave the impression of proper compliance with client fund protection requirements, although it was certainly aware of the institutions its client funds were held with and of their balances. Therefore, the Supervision Service imposed a €60,000 fine on the institution.
The company has already remedied these infringements.
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Information on enforcement measures applied by the Bank of Lithuania, complaints regarding the applied enforcement measures, and settlement results is available here.