FCA handed fines to just 18 City executives in 2013 – down 40% in four years

The Financial Conduct Authority (FCA) fined just 18 senior managers in 2013, raising concern that the misconduct and bad practice that has led to financial scandals is not being sufficiently tackled.

The figure is 40% lower than the 30 fines handed out in 2010, despite the emergence of Libor rigging and the forex scandal. The 2013 number means that only 0.03% of chief executives or senior managers were given sanctions.

The data was obtained by London law firm Reynolds Porter Chamberlain (RPC) under the Freedom of Information Act, which questioned the low number of fines imposed, considering that the strategy of holding individuals responsible could be crucial in preventing misconduct.

However, an FCA spokesperson commented, “Holding individuals to account is clearly an area where we have put a lot of resources. It was also an area that the parliamentary commission on banking standards found that we needed to improve upon, so we will be making more proposals soon.”

But RPC argued that the financial regulator was changing the way it assess its cases, with a longer and more complicated process that is giving individuals the chance to get insurance cover to counter accusations more easily.

Richard Burger, partner at RPC, said, “Individuals have got so much more to lose and so they are much more willing to fight allegations of wrongdoing tooth and nail. Not only are there substantial fines at stake, their reputation and career are on the line. Even if they are not given a lifetime ban, the chances are they’ll never work in the City again.”

Chief executive of the FCA Martin Wheatley said earlier this month that changing the culture at financial services firms would be a “long and painful job”.

Photo: Rob Schofield via flickr

Further reading:

FCA plans inquiry into 30m insurance policies

UK investors being ‘ripped off’ because of lack of competition and transparency

Number of financial complaints rose by 179% in last three months

The next financial scandal? Bank of England to hold foreign exchange inquiry

Jail irresponsible bankers, say 35% of financial services execs