FCA Fines on Regulated Firms and Individuals

We are all very familiar with the enforcement tools at the disposal of the regulator and a monetary penalty (i.e. a fine) still remains one of the most visible punishments.

It may be useful to see how the FCA, since its formation, has used this tool.

The following table shows the amounts levied with the highest penalty indicated:

 

Year

Total fines

Highest company fine

Highest individual fine

2013

£474,263,738

£137,610,000

£945,277

2014

£1,471,431,800.

£233,814,000     

£662,700

2015

£905,219,078.

£226,800,000

£2,700,000

2016

£22,216,446

£8,246,800

£14,180,000

2017

£229,515,303

£163,076,224

£105,000

2018

£60,467,212

£32,817,800

£468,600

2019[*]

£79,240,787

None (as yet)

£76,000,000

 [*] As of January 16th 2019.

Full details of each case can be viewed on the FCA website.

Some points to bear in mind:

Many of these fines were agreed to be settled at an early stage, so benefited from a 30% discount. Therefore the accrual penalty could have been much higher.

Also, a number of fines came with additional penalties, such as prohibitions from working in the financial services sector or not being able to undertake senior roles.

As you will see, many of the actions were taken under Principle 11 of the FCA’s Principles for Businesses: “A firm must deal with its regulators in an open and cooperative way, and must disclose to the appropriate regulator appropriately anything relating to the firm of which that regulator would reasonably expect notice.”  In other words, they failed to be open and honest with the regulator. Many more were related to customer detriment and not treating customers fairly.

The advent of IDD and the customer best interest rule will no doubt be reflected in the levels of future enforcement actions.

If we look at the level of individual fines, it can be seen that there are some significantly large sums which indicates that the FCA has no difficulty in punishing individuals where it is warranted.

The 2019 YTD figure already surpasses the 2016 and 2018 figure which means that 2019 may be a difficult year for some firms and individuals.

While fines may be viewed as ‘last resort’, this data shows how serious enforcement action can be on all parties. Many of the penalties are imposed on banks and larger corporate investment firms, but all sectors are under scrutiny. If you have any issues which may lead to FCA involvement, it is important that you alert all of your appropriate professional advisors at an early stage so that help and advice can be given.

 

About the author

Bruce has worked in financial services for the whole of his professional life, including 11 years as a Compliance Director of a US owned Independent Financial Advisory and Wealth Management business. At RWA, Bruce is Compliance Director and leads the Audit and Conduct Risk department from our Manchester office. He is RWA's lead consultant to the Guernsey Financial Services Commission (GFSC).

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