The total amount in fines issued for 2022 amounts to £214.25m, with some of the biggest fines on the list being issued in the latter part of the year.
Failure to have adequate systems and controls in place has been a thorn in the side of many firms on the receiving end of fines, which has brought this issue into the spotlight.
Top FCA fines in 2022
- Santander UK plc (fined £107.8m)
- TSB Bank (fined £29.75m)
- Julius Baer International Ltd (fined £18m)
- Citigroup Global Markets Ltd (fined £12.5m)
- Metro Bank plc (fined £10m)
- GAM International (fined £9.1m)
- JLT Speciality Ltd (fined £7.9m)
- Ghana International Bank plc (fined £5.8m)
- BGC LP Brokers, GFI Securities Ltd & GFI Brokers Ltd (fined £4.8m)
- Pembrokeshire Mortgage Centre Ltd (fined £2.4m)
- The TJM Partnership Ltd (fined £2m)
- TFS Loans Ltd (fined £811k)
- Barclays Bank plc (fined £784k)
- Sigma Broking (fined £531k)
- Timothy Haywood (fined £230k)
We continuously track the largest Financial Conduct Authority (FCA) fines, including those from 2019, 2020 and 2021. For the latest FCA fines, take a look at the highest penalties of 2023.
The biggest FCA fines in detail
1. Santander UK plc (fined £107.8m)
The FCA has fined Santander UK £107.7m after it discovered serious and persistent gaps in its anti-money laundering (AML) controls, affecting its Business Banking clients. The FCA found these failures to have been ongoing for almost five years.
Santander's failures led to over £298m in suspicious funds passing through the bank before it closed the accounts. The bank has not disputed the FCA's findings and has agreed to settle. This means Santander has qualified for a 30% discount. Without the settlement, the fine would have been £153.9m.
2. TSB Bank (fined £29.75m)
Breaches of PRIN 2 & PRIN 3
The FCA fined TSB Bank an amount of £29.75m for operational risk management and government failures. The Prudential Regulation Authority (PRA) also fined the bank an amount of £18.9m which brings the total fine amount to £48.65m.
The charges against TSB relate to the bank's IT upgrade programme. Technical failures in the bank's IT system resulted in customers being unable to access their accounts or banking services. All of TSB's branches were affected, and 5.2m of their customers were impacted by the initial issues.
“The failings, in this case, were widespread and serious which had a real impact on the day-to-day lives of a significant proportion of TSB’s customers, including those who were vulnerable. The firm failed to plan for the IT migration properly, the governance of the project was insufficiently robust and the firm failed to take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems.”
TSB qualified for a 30% discount on the overall penalty imposed by both regulators after agreeing to resolve the matter. Without this discount, the total financial penalty would have been £69.5m.
3. Julius Baer International Ld (fined £18m)
Breaches of PRIN 1, PRIN 3 and PRIN 11
Julius Baer International Ltd (JBI), investment advisor and wealth manager, was fined £18m for failing to conduct its business with integrity, failure to take reasonable care to organise and control its affairs and failure to be open and cooperative with the FCA.
The FCA found that JBI had a corrupt relationship with the Russian oil company, Yukos. JBI also failed to have policies and procedures in place to identify and manage the risks that arose from the relationships JBI and finders.
“There were obvious signs that the relationships here were corrupt, which senior individuals saw and ignored. These weaknesses create the circumstances in which financial crime of the most serious kind can flourish."
4. Citigroup Global Markets Limited (fined £12.5m)
Breaches of Principle 2 & Article 16(2) of Market Abuse Regulation
The FCA has levied a fine of £12.5m against Citigroup Global Markets Limited for failure to efficiently monitor its trading activity. This fine relates specifically to the 2016 market abuse regulations which required firms to police trading activity across a range of instruments and markets.
Citigroup Global Markets Limited failed to apply these rules which resulted in "significant gaps in its arrangements, systems, and procedures for additional trade surveillance". Over the 18-month period that is in question, Citi earned over £2.5bn for arranging trades.
5. Metro Bank plc (fined £10m)
Breaches of Listing Rules 1.3.3R - misleading information
The FCA has fined Metro Bank plc over £10m for publishing misleading information to investors. In the quarterly update in October 2018, the Bank published incorrect Risk Weighted Assets (RWA) figures on which its regulatory capital requirements are based.
The FCA found that the Bank was aware of the incorrect figure but they did not explain it in the update. In light of this, the Metro Bank failed to ensure that their quarterly announcement was "not false and misleading and did not omit relevant information."
6. 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."
7. JLT Speciality Limited (fined £7.9m)
Breaches of PRIN 3
The FCA imposed a fine of £7.9m on financial services firm, JLT Speciality Limited for bribery and corruption failings. It is reported that one instance of bribery involved more than $3m. The firm was also fined in 2013 for failure to have adequate risk management systems in place to counter the risk of bribery.
Despite the firm's efforts to improve systems and control frameworks, they have failed to take reasonable care to control its affairs effectively by not managing the risk of other JLT Group entities facilitating bribery.
8. Ghana International Bank plc (fined £5.8m)
Breaches of Money Laundering Regulations 2007
Ghana International Bank (GIB) plc was fined £5.8m for poor anti-money laundering controls over its corresponding bank activities. To reduce the higher risk of money laundering and terrorist financing, the FCA requires banks to carry out additional checks on correspondent banking customers. However, GIB did not adequately perform these checks.
In addition to this, GIB failed to conduct annual reviews on the information that it held on these banks that it had a relationship and did not provide staff with adequate training to assess transitions properly. Furthermore, there were no policies and procedures in place as guidance for staff.
9. BGC/GFI (fined £4.8m)
Breaches of Principle 3 of the FCA’s Principles for Businesses and Article 16(2)
The FCA fined three broker firms, BGC Brokers LP, GFI Brokers Ltd and GFI Securities Ltd (collectively, BGC/GFI) for failing to ensure that they had appropriate systems and controls in place to detect market abuse.
Due to their failure to implement the Market Abuse Regulation (MAR) trade surveillance requirements, there was an increased risk of suspicious trading going undetected. On top of this is the fact that BGC/GFI's systems for monitoring market abuse did not have sufficient coverage of all asset classes that are subject to MAR.
‘Oversight of our markets is a regulated partnership between the FCA and market participants and so gaps or holes in a firm’s ability to monitor and detect abusive trading poses direct risks to market integrity. This case is another example of the FCA’s determination to ensure firms prioritise market integrity and the maintenance of high standards of compliance.’
BCG/GFI agreed to resolve the case at an early stage and qualified for a 30% discount on the original fine amount. They have since improved their systems and controls.
10. Pembrokeshire Mortgage Centre Ltd (fined £2.4m)
Breaches of Principles 3, 7 & 9
The FCA has fined Pembrokeshire Mortgage Centre Limited (PMC) £2.4m for unsuitable advice to consumers to transfer out of the British Steel Pension Scheme (BSPS) and other defined benefit (DB) pension schemes.
The FCA's official stance is that most consumers should retain the guaranteed income provided by a DB pension. However, it was found that PMC advised almost 400 persons, almost two-thirds of whom were BSPS members, to transfer out of their DB scheme.
Many of the customers advised were in a vulnerable position due to the uncertainty surrounding the future of BSPS and the short period they had to make a decision. However, they did not receive the quality of advice required to make an informed decision. In all, PMC was found to have pocketed over £2m in transfer and ongoing advice fees.
11. The TJM Partnership Limited (fined £2m)
Breaches of PRIN 2 & PRIN 3
The FCA fined The TJM Partnership Limited (in liquidation) £2m for financial crime control failings. TJM did not have adequate systems and controls in place to identify and mitigate the risk of being used to facilitate fraudulent trading and money laundering. In addition to this, TJM failed to properly apply its anti-money laundering policies.
Trading executed on behalf of Solo Group's clients was conducted in a circular pattern which is characteristic of financial crime. The firm failed to identify any financial crime concerns or money laundering risks related to Solo Group.
12. TFS Loans Limited (fined £811k)
Breaches of Principles 6 and 3
FCA has fined TFS Loans Limited (in administration) an amount of £811k for deficient affordability checks on over 3k guarantors in its consumer credit business. In addition to this fine, the FCA has required TFS to redress the guarantors that were harmed in the process.
TFS' failure to gather appropriate information on guarantors' financial circumstances led to some guarantors being unable to afford the guarantees that they had entered into. Upon investigation, the FCA found that TFS failed to treat their customers fairly or to take reasonable action in organising their affairs responsibly.
"Friends and family members who agree to act as a guarantor for a loved one should feel confident that the lender will treat them fairly. The FCA’s affordability rules protects both consumer credit borrowers and guarantors from unaffordable risks. These requirements are high priority areas for the FCA especially as families face overall increases to their cost of living."
13. 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."
14. Sigma Broking (fined £531k)
Market abuse reporting failures
The FCA has fined Sigma Broking an amount of £531 for its failure to accurately report up to 56k contracts for difference (CFD) transactions from December 2014 to August 2016. In addition to this, the company failed to identify 97 suspicious transactions or orders. Three of the firm's directors have also been fined a total of over £200k.
The FCA recognises that Sigma's failings stem from the oversight and inadequate governance of its directors.
“Accurate transaction reporting and effective surveillance are crucial tools in identifying dodgy dealing that undermines clean markets. These bans and the scale of the fines we have imposed demonstrate our determination to ensure firms – and those who lead them – meet the reporting standards we expect.”
15. 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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