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‘No let-up’ from UK regulators, as unruly finance firms are held to account



UK regulators are not backing down against bad behaviour in the financial sector, according to research carried out by audit firm EY.

The study looked at information gathered by financial regulators and public bodies, including the Financial Conduct Authority (FCA), Financial Services Authority (FSA), Serious Fraud Office (SFO) and the Office of Fair Trading (OFT), and found that the financial services sector accounted for 94% of investigations and 99% of imposed fines for the latter part of 2012.

Combined, the fines imposed on businesses and executives amounted to £222m throughout this period, and so far have amounted to £166m for the first half of 2013.

In the past six months, the financial services sector has accounted for 76% of all investigations and 93% of fines enforced by regulators.

Banks topped the charts for heaviest fines, with the Royal Bank of Scotland (RBS) paying a £390m penalty to US and UK regulators in February and Swiss bank UBS handed a £940m ticket in December 2012 – both for rigging Libor, the inter-bank lending rate.

Back in July this year, oil trader Michael Cosica was also fined £3m for his part in manipulating the markets in order to maximise his returns.

John Smart, head of EY’s fraud investigation and dispute service (FIDS), which carried out the research, said, “This research clearly shows that there has been no let-up in regulator activity with regards to investigations into fraudulent activity and business misconduct.”

He added, “With the Sentencing Council proposing changes to guidelines that would make England and Wales one of the toughest regimes in the world for fraudulent activity and other corporate offences, directors and board members must ensure that their houses are kept in order.”

Further reading:

‘Unethical behaviour’ at UBS warrants £940m Libor fine

The terrorist’s local bank: HSBC fined £1.2bn

JP Morgan fined $920m by UK and US regulators over ‘London Whale’ cover-up

Banking regulator fines RBS £5.6m for inaccurate transaction reporting

Oil trader fined £3m for manipulation by US and UK regulators