Financial firms sack or suspend record number of staff

Marion Dakers
FINANCIAL firms and watchdogs have tightened the screws on staff suspected of misconduct in the last year, according to figures out today.

In 2012, almost 1,400 financial services workers were dismissed or suspended, or resigned while under investigation by their employer or a regulator, figures from the Financial Services Authority show.

In the same year that Kweku Adoboli was jailed for fraud and the FSA imposed a record £312m in fines, the number of “qualified” withdrawals from the FSA register rose by a whopping 76 per cent to the highest level in at least five years.

By comparison, the number of “clean” withdrawals, for example where workers leave the register through redundancy or a move to another firm, rose six per cent to almost 35,500.

The figures, published by Pinsent Masons following a request under the Freedom of Information Act, detail withdrawals from the register as far back as 2008.

“The FSA has increasingly shown that it is cracking down on financial crime and market abuse,” said Helen Farr, a financial services partner at Pinsent Masons.

“Financial services firms are operating under increased scrutiny and as a result employers are imposing industry rules more strictly.”

An FSA spokesperson declined to comment on the figures, but noted that the regulator has “a very active enforcement programme to tackle wrongdoing”.

The watchdog is preparing for another busy year, as it concludes probes into the remaining banks involved in fixing Libor and splits itself in two to become the Prudential Regulation Authority (PRA) and the Financial Conduct Authority.

The transformation has already hit a snag, with mooted PRA head Hector Sants leaving the regulator to join Barclays last year.

Meanwhile, Lloyds Banking Group confirmed yesterday that it had sacked a trader in February 2012 after irregular trades were uncovered.

The state-backed bank’s internal checks revealed “incorrect valuations of a small number of trades” linked to Franck Kornmann, a hybrid foreign exchange and interest rate trader.

Lloyds then notified the FSA and shut down Kornmann’s trading desk, which made money for its first two years but ended with a net loss in the low single-digit millions.

Kornmann’s departure has come to light after he dropped an attempt to take Lloyds to an employment tribunal last week. He is now listed as “inactive” on the FSA register. Kornmann could not be reached for comment yesterday.