CITY watchdog the Financial Services Authority (FSA) has unveiled plans to treble penalties for serious breaches of its rules, and called for individuals caught insider dealing to face a £100,000 minimum fine.<br /><br />A consultation paper from the regulator proposes a beefed-up regime in which the most serious abuses could land companies with fines of up to 20 per cent of their incomes from the products linked with the fine.<br /><br />The severe-fine push comes after FSA chief executive Hector Sants has pledged an end to the era of “light-touch” regulation, after the body was blamed for failing to prevent the climate of excess that triggered the credit crunch and associated frauds.<br /><br />FSA enforcement head Margaret Cole said the higher fines come as part of an ethos of “credible deterrence”. She said: “By hitting companies and individuals in the pocket where it hurts, the fines will be a stark warning to others.”<br /><br />Alliance & Leicester was recently fined £10m for failings on its payment-protection insurance, but that figure would have been closer to £30m under the new regime.<br /><br />As well as the minimum fine for market abuses like insider dealing, individuals carrying out FSA-regulated activities face fines of up to 40 per cent of their income for failing to properly enforce regulatory controls.<br /><br />In a case study provided by the FSA, an executive is charged £25,515 for failings in which customers of his firm were put at risk of financial losses on a product it sold them.<br /><br />The consultation ends on 21 October and the rules are likely to take effect from February 2010.
Tuesday 7 July 2009 1:00am
FSA to ramp fines for City rulebreakers
