FCA annual report reveals record rise in criminal charges

The recently published 2024 FCA annual report revealed the regulator brought a record number of criminal charges against individuals and more than doubled the number of firms it stripped of regulatory approval, supporting claims it aims to increase and expediate enforcement action.

According to its annual report, the FCA charged 21 people with financial crime offences in the past year- its highest number on record. It also reported 11 successful prosecutions- an increase of only one compared to the previous year.

The number of financial crime cases opened by the regulator also increased to 837 in the year to April, up from 613 a year earlier, though the number of fraud cases opened fell from 2,013 to 1,039.

Furthermore, the regulator stripped 1,261 firms of authorisation in the year to April- double the previous year’s level, asserting that it “want[s] consumer and market participants to be confident that firms which fail to meet [its] minimum conditions are identified and cancelled quickly”

The FCA previously proposed to publicly disclose the name of firms subject to enforcement investigations, causing backlash from the financial services sector and attracting unprecedented public criticism from then-Chancellor, Jeremy Hunt, who urged the FCA to ‘re-look’ at its plans.

Critics argued that the plans opposed the secondary objective given to the FCA to facilitate the UK’s economic growth and international competitiveness. However, in the regulator’s annual report, CEO Nikhil Rathi reaffirmed the regulator’s commitment to striking a balance between pushing for robust enforcement action in cases of financial wrongdoing and encouraging UK growth and innovation:

“If we want the UK to maintain its international competitive edge, then we need to be bold and accept that we will not, nor should we try to, stop every failure”

“As we have shown this year, we are fully committed to both supporting and balancing the different needs of consumers, businesses, and the wider economy, enabling all to flourish”

The FCA highlighted that it had accelerated its authorisation process; in 2023-24, 98% of applications were assessed within statutory deadlines, up from 89% in Q1 of 2022/23.

The FCA’s chair, Ashley Alder, said it was “conscious of the need to achieve a balance between the compliance burden on different types and sizes of firm and an FCA which is appropriately informed, assertive and agile to tackle potential and actual instances of harm”.