The Financial Services Authority is on track to treble last year's record £22m of fines. The City watchdog has so far imposed penalties totalling £55.6m and has warned that there will be more to come as it pursues a "get tough" policy with City miscreants.
Under the FSA's enforcer in chief, Margaret Cole, staff in the division that handles disciplinary cases have doubled to 450 since she took command of the operation in 2005.
And an FSA spokesman last night warned that firms which failed to obey the rules faced more pain. "It's true we are fining more and that fines are going up," the spokesman said. "We signalled through the credible deterrence policy that we were going to take stronger action and the enforcement division is much bigger than it was before."
The spokesman pointed out that the figures were skewed by the record £30m penalty imposed on the US investment bank JP Morgan for failing to properly protect client money. However, given that more of these fines are possible as the FSA cracks down in this area, the total raised in fines could approach £80m by the end of the year.
But Simon Morris, a partner at law firm CMS Cameron McKenna, said fines on individuals could prove more effective. "The crude fact is that, like capital punishment, hangings make headlines but don't stop killings – the fines roll in but so to do the breaches," he said. "A far better deterrent is action against individual managers – this really does make the board sit up and start asking about the FSA rulebook."Reuse content