The total amount in fines issued for 2022 thus far amounts to £10.1m, with Gam International's fine making up the large majority of this amount.
Failure to manage conflicts of interest has been the main cause for the financial penalties dished out this year, which has brought this breach into the spotlight.
Top FCA fines in 2022
- GAM International (fined £9.1m)
- Barclays Bank plc (fined £784k)
- Thomas Ward (fined £417k)
- Timothy Haywood (fined £230k)
The biggest FCA fines in detail
1. GAM International (fined £9.1m)
Breaches of PRIN 2 and 8 - Management of conflicts of interest
The FCA has fined asset manager GAM International Management Limited (GIML) £9,103,523. This fine is a penalty for the company failing to conduct its business with due care and attention and failing to manage conflicts of interest adequately.
The conflicts of interest are related to three transactions - two of which are linked to Greensill Capital (UK) Ltd. Former Investment Director and Business Unit Head at GIML, Timothy Haywood, was the investment manager making the decisions. The FCA has also fined him.
There were potential investments offered that could have been beneficial to GIML. Although these weren't accepted, the company failed to deal with this properly. The company failed to conflicts of interest policies were not followed properly. Consequently, potential conflicts were not considered by the people responsible for this.
“A robust framework, properly implemented and followed by all staff, is required to manage any conflicts of interest. Gam failed to do this. In an asset manager, this is vital in ensuring decisions are taken for the benefit of the investors."
2. Barclays Bank plc (fined £784k)
PRIN 2 - financial crime
Barclays Bank plc has been fined £783,800 for oversight failings in its relationship with Premier FX. Barclays was the sole banker for the collapsed payments firm.
This penalty reflects that Barclays voluntarily agreed to cover the losses of Premier FX customers whose claims were accepted by Premier FX's liquidators.
Barclays did not make enquiries to ensure that Premier FX's actual business activity aligned with Barclays' expectations. Furthermore, the company failed to identify that Premier FX's internal controls were deficient. The FCA concluded that this was a failure by Barclays to conduct its business with due skill, care and diligence.
The FCA considered the bank's action towards helping mitigate the losses for Premier FX's customers.
"Barclays was aware of these high risks in providing banking services to Premier FX but failed to take reasonably appropriate steps to mitigate those risks. Barclays’ agreement to meet the deficiency in Premier FX’s funds mitigates the actual losses to Premier FX’s customers. This is a significant step to the credit of the bank and has reduced substantially the sanction that otherwise would have been imposed."
3. Thomas Ward (fined £417k)
Breaches of Principle 1 - Failure to act with integrity
Thomas Ward is one of five directors that failed to act with integrity at financial advice firms. The financial advice that Ward, along with the other four directors, resulted in losses of £50 million for more than 2000 customers. All five directors unsuccessfully challenged the FCA's original decision from2019.
Following a 300 page judgement, the Tribunal found that the directors allowed their “instincts and values to be overridden” for personal gain. The final decision was published on 6 May.
The failed financial firms that the directors worked for had advised customers to place their pensions in high-risk financial products. The investigation found that the directors did not consider the individual circumstances of the customers.
“There are some real lessons to be learned here, which is why we want this decision to be understood loud and clear.”
4. Timothy Haywood (fined £230k)
APER 2 and 7 - Management of conflicts of interest
The FCA fined Timothy Haywood £230,037 for failing to manage conflicts of interest properly. Mr Haywood received gifts and entertainment that included travelling on a Greensill private aircraft which he failed to record with GIML promptly.
The FCA did not find evidence that the gifts and entertainment influenced Mr Haywood. However, the investigation revealed that the failure to manage conflicts of interest properly increased the chances of him being incentivised to invest.
Both Mr Haywood and GIML agreed to resolve the cases against them at an early stage, which resulted in the qualification of a 30% discount on their fine amounts.
"The FCA expects asset managers and their staff to be scrupulous in identifying and managing conflicts and their risks. This case should send a clear warning to the market."
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