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FSA fines up 53%, says RPC

The FSA issued £34.8m worth of fines in 2009, up 53 per cent on 2008, according to City law firm Reynolds Porter Chamberlain.

RPC says the average fine handed down by the FSA in 2009 was £891,000, up 97 per cent on 2008 when it was £453,000.  
This year the average fine against individuals jumped 60 per cent to £70,303, up from £43,854 in 2008.
There were eight fines of over £1m against financial services companies this year.

RPC financial services partner Steven Francis says: “Such is the complexity of the FSA’s rules and regulations that even firms with the very strongest of compliance cultures can find themselves suffering at the hands of the FSA’s new ‘get tough’ approach.
“There’s every reason to think that the financial services sector should plan for more FSA activity in 2010. What also concerns is the threat by the FSA to try and take basic regulatory infractions and prosecute them as criminal cases.”


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There are 11 comments at the moment, we would love to hear your opinion too.

  1. Well they need to get their bonus money from somewhere.

  2. where DO all these fines go ??
    is there a ‘pot’ and what is it used for ??

  3. I think the question has to be where does the money go?

  4. The FSA needs the money, fines feed the deficit and let small firms have a little breathing space before they are finally wiped out by the banks who are paying the fines.

    The fundamental issue is not the public pointing and fining after the event, it is the way the regulator supervises these entities, until the FSA has an appropriate number of supervisors monitoring banks we will continue to see problems. It was reported that Northern Rock had only six regulators dedicated to the task of supervision, recently I was told that there are as few as SIXTEEN staff allocated to Barclays. How they keep tabs on the salesforce is a mystery to mere mortals.

    All the while the FSA applies a disproportionate amount of time and money from supposedly limited resources on small firms, take the RDR for example, please take it… and burn it because all it does it create a cartel for the banks.

    We need regulatory balance, I see none.

  5. No ~ the FSA is not allowed to use fines for anything but to offset its overall budget. Which rather begs the question ~ if the FSA is raking in all these tens of of millions of pounds in fines, why aren’t the levies for the rest of us going down? It’s rather frightening to think that once the FSA starts to run out of firms on which to impose massive fines, then the true scale of its voracious appetite for money will become truly apparent. Pretty soon, we’ll be having to pay 25% of our gross turnover in levies, compliance support and PII premiums just to stand still. What a nightmare ~ at this rate, the only organisations that’ll be able to afford to stay in the game will be the Banks and a relative handfull of fee chargers catering to the HNW corner of the market. God help Middle England when all the GP IFA’s have been simply forced out of the market, either by the RDR or the cost of standing still.

  6. Where do these fines go? To help reduce our fees I hope. But I suspect not!

  7. Who guards the guard?

  8. Christmas is coming and the FSA is getting fat, so please put a million in their hat, if you have not got a million then tough luck as they will close you down anyway.

  9. It’s a shame that so many of the people who have commented are so determined to slate the FSA that they can’t be bothered doing a simple bit of research. A quick read of the FSA web site will tell you that fines levied by the FSA are used to offset the fees paid by other companies in the same fee block. So if a C2 firm is fined the other C2 firms benefit. The fact the overall fees are going up is a separate issue but hardly surprising given the public, press and politicians’ demands for more intrusive and therefore expensive regulation. Imagine what it would cost if the FSA really did regulate IFAs to the extent that many people think they should – every piece of advice independently checked, for example. Fact is, the politicians want risk-based regulation but at the first test of what that really means (Northern Rock) they backed down. That means that all financial services are going to be more tightly regulated in the foreseeable future which means more money coming from the industry. For all their faults, I think the regulators are a bit stuck in the middle – they can only do what they are instructed to do; it’s the people giving the instructions who cause the problems.

  10. Absolutely right Robert Allen. It’s all too easy to throw stones and the FSA has a huge job that the government constantly likes to add to. Failures are easy to quantify, successes very difficult. That has always been the paradox of a financial services regulator. Politicians (and others) for a long time were on the bandwagon of calling for less regulation when times seemed good and, surprise, they are the first to criticise when things go wrong – often because of lack of available regulatory resources. That is what risk based regulation is all about – not so much on where the absolute risk is (there is risk in everything of course) but how to focus limited regulatory resources to maximum effect. Now there are more resources, perhaps the FSA can start to do the job it was always meant to.

  11. I wonder if the fsa are getting big bonuses and fat pay checks, are they ripping us off too by not putting the millions back into our ripped off economy? Banks are bad boys but are fsa worse for taking the moral high ground and keeping the money? Shouldn’t it go to those actually ripped off?

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