Friday 20 April 2018

UK regulatory fines soar amid financial crime crackdown

London's Canary Wharf business, financial and shopping district
London's Canary Wharf business, financial and shopping district

Patrick Gower

UK regulators have cracked down on corporate wrongdoers following a series of scandals, including the rigging of Libor and foreign currencies, handing out record fines and seeking more criminal penalties.

Fines issued by the Financial Conduct Authority, the Serious Fraud Office and the Competition and Markets Authority soared 271pc to £2.5bn during the two years through November, accounting firm Ernst & Young in London said in a report yesterday.

The average fine climbed from £11m (€15.6m) to £42m (€59.7m) during the period. "In the wake of recent corporate scandals and growing political pressure, there seems to be a greater focus by the regulators to pursue cases that may once have been considered 'too difficult', to ensure those responsible for wrongdoing are held to account," said John Smart, head of EY's UK fraud investigation and dispute services team.

More than 30 traders were fired, suspended or put on leave over the last two years since the foreign-exchange investigations started, with about $10bn in fines levied against banks globally.

Former Citigroup and UBS Group derivatives trader Tom Hayes was sentenced in August to 14 years in jail for conspiracy to rig a version of the London interbank offered rate.

While more prison sentences were issued during the period, the length of time behind bars actually fell, the report said.

The average sentence declined 40pc to 52 months. Last week it emerged that Britain's financial watchdog had fined Barclays £72m for cutting corners in vetting wealthy customers in order to win a huge transaction described by one senior manager as potentially the "deal of the century." (Bloomberg)

Irish Independent

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