According to data released by law firm Pinsent Masons, the Financial Conduct Authority (FCA) made 109 inquiries into both UK firms and individuals last year, compared to 90 in 2013. Of the 109 investigated, 49 were UK firms and the remaining 60 were individuals.
Pinsent Masons said the data indicates that investigations are increasingly focused on corporations rather than individuals, with the number of investigations into individuals dropping by 31% since 2012.
Despite the sharp decline in the number of cases reaching a public outcome, the law firm highlighted that disciplinary action had been taken against nearly all of the individuals under investigation.
“Not surprising”
“The increased number of investigations into companies being closed without a public outcome may also raise eyebrows,” said Michael Ruck, a financial regulatory expert at Pinsent Masons. “But this needs to be seen within the context of a rise in the number of such investigations launched and the increasing sophistication of compliance functions within financial institutions.”
Pinsent Masons pointed out that the rise in investigations in 2014 came at a time when the FCA was adapting to changing regulatory priorities.
Given the FCA’s increased focus on criminal investigations, Ruck said it was “not surprising” that the number of inquiries had risen.
However, he said the decline in individual investigations – from 87 in 2012 to 60 last year – was “striking” because of “the FCA’s rhetoric around taking action against those individuals responsible for misconduct”.
“This suggests that the focus is now more targeted, focusing on a smaller group of senior individuals in addition to organisations.”
In December last year, the UK government proposed an overhaul of the FCA’s enforcement process to try to deter wrongdoers.
