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  • Towers of staples
  • 2013 sees FCA fines soar but total case numbers drop as big-ticket cases eat into resource

    • Highest ever value of fines issued by FSA/FCA 
    • Focus on big-ticket cases and senior management set to continue

    Analysis by international law firm Freshfields Bruckhaus Deringer of the number and value of regulatory actions brought by the FSA/FCA during 2013 has revealed that fines reached a record annual total of over £472 million. This is despite a fall in the number of fines levied against both corporations and individuals as pursuing big-ticket cases impacted on FCA resources.

    The agency handed down only 41 fines (24 against corporates and 17 against individuals) in 2013, down from 53 in 2012 and 55 in 2011.

     Corporate fines

    Corporate fines totalled in excess of £467 million, although with exceptional fines for Libor removed this total drops to £342 million. This compares to £300 million levied in 2012, a figure that drops to £91 million with Libor removed. The average fine for 2013 was £18.6 million.

    FCA personal and average fines

    Personal fines totalled over £4.78 million during the year, but this figure is markedly down on previous years, from £11 million in 2012 and £10 million in 2011. The average fine for individuals was a little over £281,000.

    Freshfields’ analysis has also highlighted the increasing use of censure and prohibition measures against individuals over the year. Censure, where individuals are publicly named without being fined, was applied in 4 cases, and prohibition, where an individual is barred from working in all or part of the financial services industry in the UK either for a set period or indefinitely, saw continued use, with 27 people subjected to a prohibition order during the year.

    David Scott, a global investigations partner at Freshfields commented, ‘The FCA hit the ground running on April 1st and there was no dropping of the regulatory enforcement baton. Overall fine levels are up and the FCA is increasingly seen both in the UK and internationally as an agency with real teeth that comes down hard on those that try and abuse the market.’

    He added, ‘The reduction in the number of fines we’re seeing handed down is a reflection on the caseload of the FCA – they have spent a lot of time on Libor, which has taken up a lot of agency resource. As Libor begins to wind down for the FCA we’re seeing investigations ratchet up into the FX market, so there is no let up in the demands on their capacity. However whilst this impacts on the volume of cases we see coming through, it is clear that there is a deliberate focus not only on major firms but increasingly trying to hold directors and senior management at major firms accountable for corporate failings. With the introduction in the New Year of the Senior Persons Regime this trend will continue.’

    The Senior Persons Regime, to be introduced in 2014, will see criminal sanctions introduced for senior management of banks that are guilty of ‘reckless misconduct’. Kathleen Healy, employment partner at Freshfields added, ‘From an employment law perspective, the new regime increases the obligations on banks to self-regulate, and to take disciplinary action against individuals whose actions could seriously harm the bank, its reputation or its customers. In addition, the emphasis on banks using clawback and malus in respect of past bonus and incentive awards as a further way of punishing employees for sins of the past is only going to increase as we head into 2014.’

    A full breakdown of figures is as follows:

     2010  2011 2012 2013
    Personal Fines          9.55m  9.98m  11.28m  4.783m 
    Average                   0.184m 0.285m  0.403m  0.281m 
    Number of fines  52  35  28  17 
         
    Corporate fines        79.46m  56.15m  300.28m  467.244m 
    Average    2.84m  2.44m  12.01m  18.691m 
    Number of fines        28  23  25  24

     

    For more information contact:

    Nick Parker
     PR Manager, 
    T +44 20 7 42 7 3440

    Notes for editors

    Freshfields Bruckhaus Deringer LLP is a global law firm with a long-standing track record of successfully supporting the world's leading national and multinational corporations, financial institutions and governments on ground-breaking and business-critical mandates. Our 2,500 plus lawyers deliver results worldwide through our own offices and alongside leading local firms.  Our commitment, local and multi-national expertise and business know-how means our clients rely on us when it matters most.





  • FCA fines soar
  • FCA fines soar infographic

  • 'The FCA hit the ground running on April 1st and there was no dropping of the regulatory enforcement baton. Overall fine levels are up and the FCA is increasingly seen both in the UK and internationally as an agency with real teeth that comes down hard on those that try and abuse the market.'

    David Scott, Partner

  • ‘From an employment law perspective, the new regime increases the obligations on banks to self-regulate, and to take disciplinary action against individuals whose actions could seriously harm the bank, its reputation or its customers. In addition, the emphasis on banks using clawback and malus in respect of past bonus and incentive awards as a further way of punishing employees for sins of the past is only going to increase as we head into 2014.’

    Kathleen Healy, Partner
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