The FCA is facing nine lawsuits for improperly identifying traders in penalty notices, which could lead to a possible change in rules on UK enforcement proceedings.
Bloomberg reports the FCA faced a first hearing from more than 20 lawyers last week on the reputational damage their clients suffered as the regulator failed to disguise them in bank settlement reports.
The news comes after the FCA lost a landmark appeal a month ago when a judge said it failed to properly hide the identity of former JPMorgan Chase manager Achilles Macris on the so-called London Whale case in its settlement with the bank.
Macris argued that the regulator improperly identified him when it fined JPMorgan £138m over the settlement, in which the bank lost $6bn on derivative positions taken by one of its traders.
When publishing settlement notes the FCA is meant to keep individuals anonymous to avoid legal prejudice in possible future cases against them. The regulator is also meant to give that person a right to make representations before findings are published.
“Part of deterrence is telling the story and if you’re telling it with one hand behind your back, because you can’t allude to individuals, it will make things difficult,” FCA chief executive officer Martin Wheatley told Bloomberg.
If the FCA fails to win an appeal to the Supreme Court on the Macris case, it would decide to take years to complete investigations on financial firms giving all parties the chance to participate. It could also choose to publish settlements that won’t fully explain the misconduct.