An end of year surge in fines has seen the value of FCA fines increase fourfold to £618m this year, up from £156m last year, the highest value of fines in six years, according to new data shared with City A.M. this morning.
The increase in fines in 2021 was dominated by four blockbuster fines each worth well over £50m. Last year saw just one fine issued over £50m, law firm RPC found.
The largest fine of £265m was imposed on NatWest for failing to comply with anti-money laundering (AML) measures. Another bank also received a £64m fine for AML failures, while an international investment bank was fined nearly £150m for failures in its anti-bribery controls .
Another commercial bank was fined £90m for treating consumers unfairly in the renewal of their home insurance.
The number of fines also increased by 71 per cent in the last year, from seven to 12.
However, financial penalties do not capture the entire array of the FCA’s enforcement. As well as non-financial penalties, the FCA has a number of tools at its disposal such as withdrawals of authorisation and variations of permission to prevent businesses carrying out certain activities.
The FCA has been working hard to clear a backlog of cases this year. With many past cases dealt with, new investigatory activity is expected to pick up in 2022, RPC said.
Jonathan Cary, partner at RPC told City A.M. today that “this year, financial institutions have again been reminded that the FCA will not hesitate to impose sizeable fines – sometimes in the hundreds of millions – for serious failings.”
“While the increase in the value of fines is striking, that alone, does not capture the complete picture of the FCA’s enforcement activity over the last 12 months,” Cary added.
“The FCA has a range of other tools it is increasingly prepared to use beyond imposing a major fine. Having permissions withdrawn or varied can be even more serious for a regulated firm,” he said.
“While resource does remain an issue, having managed to clear some large cases and with the efforts to rationalise its caseload, the FCA will be looking to ramp up its enforcement activity in the year ahead,” Cary concluded.