UK FSA fines approach £100 million

Daily news headlines

LONDON – Fines administered by the UK Financial Services Authority (FSA) since its creation in 2001 are approaching the £100 million mark. The regulator is particularly focusing on market abuse and Treating Customers Fairly (TCF) failings, and both of these areas have seen high-profile fines in the past year.

Almost 40% of this year’s £20.5 million in fines were levied against Santander-owned UK bank Alliance & Leicester (A&L). A&L and HFC Bank, part of HSBC, were jointly fined £8.1 million for mis-selling payment protection insurance – a key focus of the FSA’s TCF regime.

A number of cases in 2008 have related to market abuse, but most of these fines concern events that occurred several years ago. High-profile market abuse allegations relating to share prices in UK bank HBOS prompted an FSA investigation, but no charges were brought.

Selwyn Blair-Ford, a senior domain expert for UK regulation at FRSGlobal, says: “For the UK financial market as a whole, we can applaud where the regulator successfully challenges and reprimands undesirable behaviour. However, the fines do not appear to really address the issues of insider trading or market manipulation. We need to have a plea bargaining arrangement, where the guilty can mitigate punishment by blowing the whistle on others, to further address these issues.”

September’s ban against short selling of shares in several UK banks – still in operation – is another FSA move to stymie suspected market abuse. Despite political talk of ‘spivs in suits’, this action is not aimed at individual abusers but rather at a long-established form of speculation within the financial system.

“Action should not have been taken unilaterally against short selling, but instead against those individuals spreading rumours to drive the price of stocks down. In short, don't penalise short sellers but instead arrest or fine the market manipulators,” says Blair-Ford.

  • LinkedIn  
  • Save this article
  • Print this page  

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: