In 2016, financial regulators across major markets brought four times as many cases against individuals than companies last year, according to the latest installment of Duff & Phelps’ Global Enforcement Review.
A total of 1,761 enforcement actions were brought against individuals in the UK, USA and Hong Kong by their respective regulatory bodies in 2016, roughly equivalent to seven cases per every work day of the year.
While the US remained atop the leaderboard for the highest number of convictions of financial employees, the Duff & Phelps findings showed that the FCA has stepped up its game, setting its sights on more individuals than ever before.
In the UK, the number of FCA proceedings brought against individuals versus those brought against firms skyrocketed in the span of two years, lifting from just 34% in 2014 to 64% in 2016.
The number of fines imposed on individuals versus firms by the Bank of England’s Prudential Regulation Authority, did not change, however, and stayed put at 60%.
The regulator’s renewed focus on individuals, emphasised this week with its extension of the senior managers’ regime, is evidence that “we are in an era of greater individual accountability,” said Julian Korek, global head of regulatory and compliance consulting at Duff & Phelps.
“The Duff & Phelps Global Enforcement Review is now in its fifth year, and never before has the regulatory magnifying glass been so emphatically focused on the actions of senior executives.
“In the past, firms were slightly less worried about the size of fines imposed by regulators. But now with individuals being targeted, management may be keener to push back against enforcement actions at every stage.”
And based of the consultancy’s findings, Korek anticipates that the number of proceedings brought by the FCA will only go up from here.
“The recent spate in proceedings against individuals shows too that the regulators are willing to bare their teeth in the face of ongoing financial crime.
“It is now widely accepted that new regulations will likely lead to even more enforcement actions against individuals in future years. The chasm that now exists between fines against individuals compared with those against firms will therefore widen significantly.
“As this level of scrutiny continues to grow, it will become increasingly important for financial institutions across the globe to focus on cultivating a more transparent and responsible corporate culture.”
