City law firm Reynolds Porter Chamberlain calculated that the average fine handed out by the FSA amounted to 497,000 compared with 212,000 in the previous financial year. Even excluding fines over 1m, RPC found that the average fine still increased by 20 per cent from 111,000 to 133,000.
The number of fines also more than doubled to a record 55.
The FSA prohibited 46 individuals or firms from carrying out regulated activity, which is more than in all previous years combined.
Reynolds Porter Chamberlain regulatory partner Jonathan Davies says: “The FSA has been under public and political pressure this year for failing to foresee problems with failing banks and financial institutions. It has reacted by instituting a get- tough approach. The FSA is taking an aggressive approach towards mortgage advisers, probably because falling house prices have exposed fraudulent market practices which remained hidden when prices were rising.”
Davies says that more than year can pass after the regula-tory lapse of a firm or individual before the FSA publishes a final notice of any enforcement activity that it took.
As a result, he considers that many credit crunch fines have yet to come to public attention, meaning that enforcement activity is likely to show an increase for several years.