184 firms and individuals under FCA investigation

UK regulator received more than 2,700 allegations of misconduct from whistleblowers

|

The Financial Conduct Authority handed out £189.8m ($263.1m, €223.8m) in penalties over the last 12 months.

The regulator’s Annual Report and Accounts 2020/21 also showed that there are currently 184 individuals and firms under investigation for carrying out unauthorised business.

According to analysis of the report by UK think tank Parliament Street, around 2,754 allegations of financial misconduct were received by the FCA from 1,046 whistleblowers – a very small reduction from the 1,100 the previous year.

The watchdog said that:

  • 15 led to “significant action” to mitigate harm, which included enforcement action;
  • 135 led to “action” such as writing to or visiting a firm, requesting information, or asking a company to “attest to compliance with the rules”;
  • 145 cases helped inform the FCA’s work and were relevant to the prevention of harm but did not lead to specific action;
  • 97 cases were considered not relevant; and,
  • 645 were still being assessed when the report was published.

The most complained about issues were fraud, money laundering, compliance, customer treatment, systems and control, the think tank said.

Additionally, 2020/21 was also the first full financial year where the FCA was responsible for accessing anti-money laundering measures of cryptoasset businesses as they pose increasing risk of financial crime.

The report showed that 138 firms seemed to be trading without having applied for registration.

Regulatory technology

Wayne Johnson, chief executive of compliance software provider Encompass Corporation, said: “This year, more individuals are attempting to use the chaos of the pandemic to carry out financial crime.

“Therefore, it is important that the FCA is taking the necessary to steps to tighten their control and increase visibility over new sectors and payments technologies, such as cryptocurrencies, which are being used to launder money.

“But the fight against financial crime can’t be won by the regulators alone, and businesses from all sectors must improve the efficiency and effectiveness of their onboarding processes, compliance and due diligence, not just for the sake of ‘ticking boxes’ and averting regulatory fines, but to help prevent even more financial crime and dirty money running through critical businesses and infrastructure.

“In today’s digital climate, organisations are encouraged to invest in automated regulatory technology, which can boost the effectiveness and efficiency of compliance programmes whilst keeping costs low.”

Latest Stories