This month's key compliance news includes bribery at Balt and Colas, the new guidance on non-financial misconduct, the Bank of London fine, risk and the Strait of Homuz, and more.
Firms need to start preparing for the new rules and guidance to tackle non-financial misconduct (NFM) in the workplace.
The Financial Conduct Authority defines NFM as behaviour that's not of a financial nature, such as bullying, harassment and violence.
The regulator said that where NFM goes unchecked, it can harm individuals, firms and overall confidence in the financial services sector.
The new rule COCON 1.1.7FR comes into effect from 1 September 2026, extending the scope of conduct rules to around 37,000 non-banking regulated firms. It will cover bullying, harassment and violence, where there is a work-related link.
Under the fit and proper (FIT) rule, firms may already consider misconduct when assessing individuals' fitness and propriety.
While the new COCON rule focuses on conduct where there is a work-related link, the new FIT guidance includes a wider range of NFM that firms should take into account when assessing individuals.
Firms are being encouraged to start preparing now, ahead of the implementation date.
There were 4,224 reports of misconduct in the year 2024/2025, up 10% on the previous year, when there were 3,843 reports.
The new guidance follows the high-profile case of Crispin Odey, who was fined £1.84 million and banned from the industry after claims were made in the Financial Times that he sexually harassed or assaulted women "for decades".
The regulator said he showed "reckless disregard" for the governance of the hedge fund Odey Asset Management and instead sought to protect his own interests.
Odey is currently challenging his case through the courts.
A long-serving commercial manager won nearly £400,000 after his employer refused to honour decades’ worth of unused holiday leave. The employee had worked for the company since 1987 and, due to heavy workloads and limited staff, was often unable to take his annual leave. Over time, his unused holiday days accumulated to more than 800 (over two years' worth).
To address this, he reached an agreement with the company that his unused leave could be carried forward and paid later, rather than taken. This arrangement continued for many years.
However, after new management took over, the company refused to recognise this long-standing agreement. The employee was later dismissed and denied payment for the accumulated leave.
An employment tribunal ruled in his favour, deciding that:
As a result, he was awarded around £392,000 for unpaid holiday, plus additional compensation for unfair dismissal, bringing the total to over £400,000.
Medical device company Balt SAS has avoided prosecution after it voluntarily disclosed an alleged bribery scheme that was uncovered during an internal review.
Over a six-year period, David Ferrera, an executive at Balt's US subsidiary, and consultant Marc Tilman allegedly paid bribes to an official at a hospital in Reims, France to influence him to purchase medical devices from Balt.
Ferrera made corrupt payments to the consultant Tilman who worked for Balt's US subsidiary at the time, knowing that some of those payments would be passed on to the official. Payments were disguised as consulting fees and bonuses and the pair allegedly used sham consulting agreements, fake invoices and personal email accounts to conceal the bribes.
Balt has agreed to pay $1.2 million to "disgorge the amount of its ill-gotten gains" and will not now face prosecution in the United States and France.
"Today's resolution - the first ever under the Department-wide Corporate Enforcement Policy - demonstrates the value of voluntarily self-reporting wrongdoing to the Department of Justice."
-Department of Justice
Meanwhile, Ferrera and Tilman are each charged with violating the Foreign Corrupt Practices Act (FCPA) and with money laundering. If convicted, they face up to five years in prison for the bribery charges and up to 20 years for the money laundering charges.
"Ferrera and Tilman allegedly conspired to pay bribes to a French physician, who in turn caused a hospital in France to purchase medical devices from their company. […] When corruption extends beyond our borders, the FBI works with our international partners to bring individuals to justice."
-FBI
A Malaysian subsidiary of Colas Group has agreed to pay $34.4 million after it reported bribery of public officials, including a member of the Malaysian royal family.
The self-disclosure and subsequent negotiated agreement means that Colas will not face prosecution under the Sapin II Act, France's anti-corruption law.
The French transportation infrastructure group undertakes roads, railways, and defence projects globally through its subsidiaries.
The Malaysian subsidiary is affiliated with Colas Rail and was involved in infrastructure projects throughout the region, including Kuala Lumpur's Klang Valley Mass Rapid Transit system.
The case is believed to relate to concerns about Colas-linked firms and contract practices going back to 2022, where high-profile figures were implicated, including royal connections.
Early settlement allows the matter to be resolved quickly without the need for a protracted court case. So far, details about the individuals involved, the amounts paid and exact projects are limited due to the confidential nature of the settlement.
The Bank of London Group (TBOL) has been fined £2 million by the Prudential Regulation Authority (PRA) for failing to act with integrity and for misleading the PRA over its financial health.
"This included submitting to the PRA a false account of the consolidated and solo capital position in a report of the firm's capital requested by the PRA", said the PRA.
The British fintech and its parent company Oplyse Holdings repeatedly broke the rules to mislead the regulator about its actual financial position and failed to be open and cooperative with the PRA in relation to crisis talks about its deteriorating solvency position ("Project Rainbow"). In addition, it failed to maintain adequate financial resources and act in a prudent manner by failing to manage or report a large exposure resulting from a loan by TBOL to Oplyse Holdings. The relationship between the two companies was not appropriately disclosed.
It's the first time that the regulator has imposed a penalty on a company for "failing to conduct its business with integrity" and it's also the first time that the regulator has taken enforcement action against the parent financial holding company of a firm.
The violations occurred between October 2021 and May 2024. Although the breaches warranted a financial penalty of £12 million, this was reduced to £2 million after the companies demonstrated that such a penalty would cause serious financial hardship to the fintech.
The clearing bank launched in 2021 with an initial valuation of $1.1 billion but its accounts show losses of £24 million in 2024.
"Trust in banking in the UK requires integrity and open communication with the PRA from all banks, regardless of their size. The Bank of London Group Limited and Oplyse Holdings Limited fell well below our standards, resulting in today's penalty which marks the PRA's first finding against a firm for acting without integrity."
-Prudential Regulation Authority
A spokesman for the Bank of London said:
"As is acknowledged in the final notice, since the change in ownership, the Bank has changed its management team and invested heavily in processes and controls and engaged third parties to assist in their remediation activity."
"The board and leadership team are confident that, with these legacy matters settled and with the backing of its investors, the Bank will continue to enhance trust and be able to return to growth in 2026."
However, for the time being, there is a client freeze and TBOL "must not, without the prior written consent of the FCA, onboard any new clients".
Pressure is growing in the international community to find a way to reopen the Strait of Hormuz.
The vital shipping lane has been officially closed since 2 March amid the escalating Middle East conflict.
Around 800 vessels and their crews are trapped and are waiting to restart their journeys, resuming global supplies of oil, gas and other consumer goods. These vessels have aggregate hull values of between £20 and £32 billion, according to the Lloyd's Market Association (LMA).
Twenty-three vessels have been attacked in the waterway since the start of the war, say analysts from Lloyd's List Intelligence.
While shipping insurance has been available at the "right price", there's little appetite for traversing the strait. Most shipowners are prioritising safety, keeping their vessels anchored in the Gulf or at local ports instead.
War insurance premiums have risen 3.5-7.5% of each vessel's value since the start of the conflict, according to one broker from McGill and Partners.
But it's not the cost of insurance that is the main driver, as Silke Lehmköster - the fleet managing director of the German shipping company Hapag-Lloyd - has made clear. It currently has six vessels and 150 crew in the waterway, which have faced a barrage of drones, explosions and smoke. One of its cargo ships was recently hit by shrapnel, causing a small fire, which was dealt with by the crew.
"We would need an end of this escalation, so that there are no drones, no missiles, no whatsoever flying, and a clear message from everyone that they would stop."
-Silke Lehmköster, Hapag-Lloyd
The United Nations' shipping agency is responsible for regulating international safety. It wants to see a humanitarian corridor to evacuate commercial vessels and crew from the area. But there is currently no timeline for this to happen.
Iran has said that 'non-hostile' ships can transit the waterway but it's unclear whether payment is required to do so.
Another proposal under review is the use of military escorts, which may help reduce the costs of insurance.
Meanwhile, other companies are finding workarounds. According to Reuters, Maersk is using alternative land-bridge routes, such as Jeddah in Saudi Arabia, Salalah and Sohar in Oman, and in Khor Fakkan in the United Arab Emirates to bring in critical cargo like food and medicines, before it's moved by land across the region.
As the economic fallout and disruption continues, the international community is exploring ways of opening "a safe route through the strait" and working to deliver much-needed "reassurance to merchant shipping".
Banks and financial institutions (FIs) need to do more to combat illegal mining risks, according to a new report by the World Wildlife Fund (WWF) and financial crime risk platform Themis.
The findings are based on a survey of 647 institutions in 22 countries.
Although 84% of financial institutions operate in at least one high-risk sector, such as transport or transit, the study found that:
Without adequate controls, financial institutions are exposed to potential financial crime, regulatory penalties and reputational damage.
Legal mining plays a valuable role in producing vital and luxury items for society, from jet engines to jewellery.
According to the report, illegal mining generates $48 billion a year in criminal proceeds. For example, it accounts for 90% of Venezuela's gold production. It's not just a conservation matter – it's often linked to money laundering, corruption, tax and sanctions evasion, conflict financing, trafficking, forced labour, and environmental crime.
Other findings include:
The report recommends the following:
Implement enhanced due diligence (EDD)across our supply chain exposure - to cover mining clients in high-risk areas, and also suppliers and firms in adjacent sectors, eg equipment, logistics, refining and trade
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