The total of notable FCA fines issued in 2024 so far is just under £930k. This does not include the provisional fine of £5.95m, which is being contested. The trend that appears to be developing this year is that individuals are tripping up, negatively impacting customers and investors.
With this pattern emerging, it is more important than ever for staff, including senior management, to engage in FCA compliance training. The consequences of inadequate advice or misleading information in financial services can be detrimental, resulting in heavyweight penalties.
Top FCA fines in 2024
We continuously track the largest Financial Conduct Authority (FCA) fines, including those from 2019, 2020, 2021,2022 and, most recently, the highest FCA of 2023.
The biggest FCA fines 2024 in detail
1. Inspirational Financial Management (IFM) (fined £897k)
Breaches of Principles 3, 6 and 9
The FCA has fined Inspirational Financial Management (IFM) just under £900k after they had poorly advised people to transfer out of defined benefit (DB) pension schemes, including the British Steel Pension Scheme (BSPS).
During the period from June 2015 to December 2017, IFM allegedly failed to properly assess if pension transfers were in clients' best interests, with 83% of their advice not meeting regulatory standards. Upon investigation, the FCA found that Arthur Cobill and William Hofstetter had provided inadequate advice to clients regarding pension transfers, leading to significant financial losses.
Cobill and Hofstetter agreed to pay fines totalling £160,000 and were banned from providing pension transfer advice. Furthermore, with IFM undergoing administration, priority will be given to creditors to ensure adequate compensation for affected clients.
2. Floris Jakobus Huisamen (fined £31.8k)
Breaches of CoBS (financial promotions in the Issuer sector)
Floris Jakobus Huisamen, a former director at London Capital & Finance (LCF), has been fined £31,800 by the FCA and banned from the financial services sector. He was responsible for compliance at the company but approved numerous misleading financial promotions. This led to thousands of investors being misinformed about the risks involved.
The FCA found that the promotions for minibonds targeted at retail investors misrepresented the true nature of the product, concealing important risks such as hidden charges and the unsustainable lending practices of the company. Despite his own reservations about LCF’s strategy, Huisamen approved these promotions without ensuring their accuracy.
“Mr Huisamen should have ensured LCF’s financial promotions were ‘fair, clear, and not misleading’. However, under him, the approval process became an ineffective tick-box exercise – as a result, thousands of investors were persuaded to invest on the basis of highly misleading statements."
Provisional fine - Nailesh Teraiya (£5.95m fine)
The FCA has provisionally fined Nailesh Teraiya, the former head of Indigo Global Partners Limited, £5.95 million and banned him from regulated activities for his role in a fake trading scheme. Teraiya is contesting the FCA's decision.
The scheme involved Indigo's participation in a fraudulent share trading plan that obtained a purported tax repayment of €91.2 million from the Danish tax authority. However, this repayment was based on non-existent shares, with no dividends or tax deductions.
In addition to this, Teraiya personally received over £5.1 million from third parties for his involvement. The FCA's fine aims to strip Teraiya of the financial gains from the scheme.
Want to learn more about FCA Compliance?
We have created an SMCR roadmap to help you navigate the compliance landscape, supported by a comprehensive library of FCA Courses.
We also have over 100 free compliance training aids, including assessments, best practice guides, checklists, desk aids, eBooks, games, posters, training presentations and even e-learning modules!
Finally, the SkillcastConnect community provides a unique opportunity to network with other compliance professionals in a vendor-free environment, priority access to our free online learning portal and other exclusive benefits.
