The Netherlands Authority for the Financial Markets (AFM) has imposed three fines totalling €1.6 million on Saxo Bank A/S.

The fines were imposed for violations by BinckBank N.V., a broker that offered online investment services and was acquired by Saxo Bank in 2019. An AFM investigation has shown that BinckBank acted in violation of the rules for asset segregation, risk management and careful customer treatment during the migration to Saxo Bank.

The violations occurred in the period from 1 January 2021 to 11 April 2023.

The AFM considers this to be very serious, because it exposed investors to unnecessary risks and damaged investor confidence.

The AFM launched an investigation in 2022 following signals from consumers and a critical report from BinckBank’s accountant. Consumers complained on review websites and in the media about delayed transactions, incorrectly charged costs and untraceable shares. The AFM found that BinckBank did not have accurate administration of investment portfolios, had insufficient control over critical business processes and had not acted sufficiently in the interests of its customers.

Based on the results of the investigation, the AFM has decided to impose three administrative fines on Saxo Bank, as the legal successor to BinckBank.

The first fine of €500,000 was imposed because of serious shortcomings in the administration of investment portfolios, which meant that it was no longer possible to determine with certainty who the investments and funds belonged to. BinckBank violated the asset segregation rules. As a result, investors were said to be insufficiently protected in the event of bankruptcy, BinckBank lost track of the investment portfolios and there was also a risk that securities were lent without the permission of customers.

The second fine of €500,000 was imposed because BinckBank had insufficient control over the business processes with which it should have limited the risk of loss or reduction of investors’ shares and funds. Many of the checks on these processes were carried out too late, ineffectively or not at all.

The third fine of €600,000 was imposed because of customer treatment. Investors encountered all kinds of problems in the period surrounding the migration. They were faced with amounts that were transferred too late, transactions that were processed too late and excessive costs and taxes that were charged. Customers who wanted to switch to another broker experienced serious delays in transferring their portfolios.

This was not only a problem for the investors, but also for other banks and brokers who were unable to serve their new customers properly as a result.

BinckBank customers were unable to address their problems and concerns properly. Customer service was often difficult or impossible to reach, provided incorrect information or made promises that were not kept. Customers posted hundreds of complaints on review websites in which they expressed their feelings of frustration and helplessness.

Saxo Bank did not appeal the fines imposed, which means that they became irrevocable on 25 December 2024.