ZYC-FRD-001 Fraud Prevention Policy
(Applies to all Zeyro staff, directors, contractors, and consultants — Updated October 2025)
Background
Zeyro is authorised by the Financial Conduct Authority (FCA) and must maintain effective systems and controls to prevent financial crime (SYSC 3.2.6R, Principle 1 – Integrity). While Zeyro does not hold client money, fraud risks can arise through our core activities — financial promotion approvals and arranging deals in investments — where false representations or omissions could mislead clients or counterparties.
This policy complements the AML / CTF / Anti-Proliferation Policy (ZYC-AML-001) and Anti-Bribery & Corruption Policy (ZYC-ABC-001).
Purpose
To protect Zeyro, its clients, and stakeholders from fraud by:
Preventing, detecting, and responding to fraudulent acts.
Embedding proportionate controls into daily operations.
Promoting a transparent, accountable culture.
Scope
Applies to:
All employees, contractors, and agents.
All activities involving client onboarding, financial promotions, arranging, and internal operations.
Definition of Fraud
Fraud is any intentional deception or omission designed to secure an unlawful gain or cause loss to another. Examples include:
False or misleading statements in a financial promotion.
Misrepresentation during client onboarding or due diligence.
Manipulation of client, asset, or transaction information.
Unauthorised or deceptive activity between clients and asset managers.
How this controls our risks: Provides a clear boundary for identifying and classifying fraudulent behaviour.
Fraud Risk Assessment
Fraud risk is assessed annually through the Business-Wide Risk Assessment (BWRA), focusing on:
Financial promotions – risk of approving false or misleading information.
Arranging services – risk of counterparties misrepresenting credentials or intentions.
Internal processes – risk of employee misconduct or data manipulation.
How this controls our risks: Ensures ongoing awareness of where fraud exposure is highest and informs targeted controls.
Preventive Controls
1. Client & Counterparty Due Diligence
All clients are subject to KYC / KYB via DotFile before engagement.
Enhanced Due Diligence (EDD) is performed where risk factors (e.g. high-risk jurisdictions) are present.
Ongoing monitoring identifies risk-profile changes or red flags.
2. Financial Promotion Controls
All promotions must be clear, fair, and not misleading in line with FCA rules.
A multi-layered approval process (Compliance + Legal review) detects potential deception.
Records of all approvals and rationales are maintained.
3. Internal Controls
Segregation of duties: individuals preparing, reviewing, and approving promotions or onboarding tasks must be different.
Dual authorisation: payments ≥ £1,000 require two sign-offs.
System access: restricted to authorised personnel only.
Training: annual fraud-awareness sessions for all staff.
How this controls our risks: Prevents single-point failures and embeds independent oversight across critical processes.
Detection & Monitoring
Transaction & Activity Review: The MLRO/Compliance Officer monitors client and internal activity quarterly for anomalies.
Red-Flag Indicators: reluctance to provide documentation, inconsistent data, or unusual client structures.
Consumer Protection Focus: particular vigilance for fraudulent crypto-asset promotions or unauthorised firms seeking credibility via Zeyro approvals.
How this controls our risks: Provides an early-warning mechanism for both external and internal fraud patterns.
Reporting & Escalation
If fraud is suspected:
Stop the activity and preserve evidence.
Report immediately to the MLRO / Compliance Officer (Gareth Malna).
Do not inform the suspected party.
The MLRO will investigate, escalate to the Board, and, where required, report to the FCA, Action Fraud, or the National Crime Agency (NCA).
How this controls our risks: Ensures prompt, controlled escalation and regulatory compliance.
Whistleblowing
Employees, contractors, and third parties can report concerns confidentially through Zeyro’s Whistleblowing Policy (ZYC-WHB-001). Anonymity and protection against retaliation are guaranteed.
How this controls our risks: Encourages openness and facilitates early detection of concealed fraud.
Enforcement
Confirmed or attempted fraud may lead to:
Disciplinary action up to dismissal.
Regulatory or criminal reporting.
Civil recovery of losses.
How this controls our risks: Maintains accountability and deterrence.
Training & Awareness
Fraud-awareness training is part of onboarding and refreshed annually. Modules include:
Recognising typical fraud typologies.
Escalation procedures.
Links between fraud, AML, and ABC frameworks.
How this controls our risks: Reinforces staff vigilance and reporting confidence.
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