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| City wrongdoers face bigger fines | City wrongdoers face bigger fines |
| (20 minutes later) | |
| The Financial Services Authority (FSA) wants to impose much bigger fines on firms or individuals who cheat their customers or engage in insider dealing. | The Financial Services Authority (FSA) wants to impose much bigger fines on firms or individuals who cheat their customers or engage in insider dealing. |
| It says its current level of fines have not been high enough to deter wrongdoers and the new fines will treble its penalties in some cases. | |
| Firms could be fined 20% of turnover, with individuals liable to penalties of 40% of their salary and bonuses. | Firms could be fined 20% of turnover, with individuals liable to penalties of 40% of their salary and bonuses. |
| Individuals guilty of "market abuse" will be fined a minimum of £100,000. | Individuals guilty of "market abuse" will be fined a minimum of £100,000. |
| In the last financial year the FSA imposed a record £27.3m in fines, up from just £4.4m the year before. | In the last financial year the FSA imposed a record £27.3m in fines, up from just £4.4m the year before. |
| It also banned a record 58 people from carrying out jobs it regulates, compared to 30 the year before. | It also banned a record 58 people from carrying out jobs it regulates, compared to 30 the year before. |
| 'Real difference' | 'Real difference' |
| Margaret Cole, the FSA's director of enforcement, said her organisation needed a stronger deterrent. | Margaret Cole, the FSA's director of enforcement, said her organisation needed a stronger deterrent. |
| "By hitting companies and individuals in the pocket where it hurts, the fines will be a stark warning to others on what they can expect to pay for flouting our rules," she said. | "By hitting companies and individuals in the pocket where it hurts, the fines will be a stark warning to others on what they can expect to pay for flouting our rules," she said. |
| "Moving to this new framework will enable our enforcement policy to continue making a real difference to consumers and to changing behaviour in the financial services sector," she added. | "Moving to this new framework will enable our enforcement policy to continue making a real difference to consumers and to changing behaviour in the financial services sector," she added. |
| The FSA's proposed new scale of fines is going out to consultation with the plan likely to be implemented in February 2010. | The FSA's proposed new scale of fines is going out to consultation with the plan likely to be implemented in February 2010. |
| "The new plans reflect the FSA's determination to change behaviour and address concerns that firms are repeatedly failing to improve standards e.g. in relation to mis-selling to consumers and market misconduct," it said. | "The new plans reflect the FSA's determination to change behaviour and address concerns that firms are repeatedly failing to improve standards e.g. in relation to mis-selling to consumers and market misconduct," it said. |
| "They will also ensure that fines better reflect the scale of the wrongdoing and that any profits made from the breaches are clawed back," it explained. | "They will also ensure that fines better reflect the scale of the wrongdoing and that any profits made from the breaches are clawed back," it explained. |
| Fines | Fines |
| The past financial year has already seen a tougher approach from the FSA. | The past financial year has already seen a tougher approach from the FSA. |
| It fined or banned 23 fraudulent mortgage brokers, with some being investigated and arrested by the police, and three being fined more than £100,000 each by the regulator. | It fined or banned 23 fraudulent mortgage brokers, with some being investigated and arrested by the police, and three being fined more than £100,000 each by the regulator. |
| Fines totalling £9.5m were levied on 20 firms for exposing customers to the risk of bad advice. | Fines totalling £9.5m were levied on 20 firms for exposing customers to the risk of bad advice. |
| The mis-selling of payment protection insurance led to 10 firms being fined for mis-selling payment protection insurance (PPI), with the Alliance & Leicester being fined a record £7m. | The mis-selling of payment protection insurance led to 10 firms being fined for mis-selling payment protection insurance (PPI), with the Alliance & Leicester being fined a record £7m. |
| So far a total of 20 firms have been fined £11.8m over PPI. | So far a total of 20 firms have been fined £11.8m over PPI. |
| Charges of market abuse led to fines of nearly £5m, including a £4m fine on the Winterflood market making firm. | Charges of market abuse led to fines of nearly £5m, including a £4m fine on the Winterflood market making firm. |
| And three firms were fined a total of £735,000 for not publishing price sensitive information to stock market investors quickly enough. | And three firms were fined a total of £735,000 for not publishing price sensitive information to stock market investors quickly enough. |