The Financial Services Authority
(FSA) has issued fines amounting to a record £33.1 million in the last year. This is a rise of 21 per cent on the previous year, a sure sign that the FSA is implementing its policy of ‘credible deterrence’ in dealing with the City. The amount of the average fine also increased considerably, up to £788,571 for each firm, which is a rise of 59 per cent.
The fines included:
the largest ever fine, of £8 million, handed out to UBS when it failed to prevent its wealth management business employees from undertaking unauthorised transactions; and
the largest ever fine for market abuse issued against an individual, Mehmet Sepil, CEO of a Turkish oil exploration company.
Despite the increase in the sizes of fines, the vast majority (86 per cent) were settled prior to litigation and were discounted as a result.
In line with its adoption of a tougher stance towards banks in the wake of the financial crisis, the FSA is set to take increasingly tough action against financial misconduct in the future. A new fine policy sets a minimum fine of £100,000 for intentional market abuse. The new policy also allows penalties of up to 40 per cent of salary and benefits to be levied on individuals and fines on organisations of up to 20 per cent of the revenue generated by the business in which the wrongdoing took place.
If you have been negligently advised with regard to financial products and have as a result suffered a loss, contact us for advice.