With just over a month of the year remaining, the total of notable FCA fines issued in 2024 is just over £121.5m. The trend that has appeared over this year is firms' failure to maintain adequate systems and financial crime controls. Treating customers fairly has also proved to be an issue.
While the individuals tripping up have failed to act with honesty and integrity, negatively impacting customers and investors.
With these patterns emerging, it is more important than ever for staff, including senior management, to engage in FCA compliance training. The consequences of inadequate advice or misleading information in financial services can be detrimental, resulting in heavyweight penalties.
Top FCA fines in 2024
- Starling Bank Limited - £28.9m
- Citigroup Global Markets Ltd - £27.7m
- Metro Bank plc - £16.6m
- PricewaterhouseCoopers LLP - £15m
- TSB Bank plc - £10.9m
- HSBC UK Bank plc, HSBC Bank plc, & M&S Financial Services plc - £6.2m
- Volkswagen Financial Services (UK) Limited - £5.4m
- CB Payments Limited - £3.5m
- Steven Harbinder Singh Sahota - £1.7m
- Anthony Dale Cuming - £1.6m
- Leigh Mackey - £1.1m
- Inspirational Financial Management (IFM) - £897k
We continuously track the largest Financial Conduct Authority (FCA) fines and identify trends in breaching FCA rules year on year.
The biggest FCA fines 2024 in detail
1. Starling Bank Limited (fined £28.9m)
Breaches of Principle 3 and s.204A of FSMA
The FCA has fined Starling Bank £28.96 million for significant failings in financial crime controls, including inadequate sanctions screening and breaches of restrictions on opening high-risk accounts.
Starling experienced rapid growth from 43,000 customers in 2017 to 3.6 million by 2023 but failed to maintain effective financial crime prevention measures. Despite agreeing to restrictions in 2021, the bank opened over 54,000 accounts for high-risk customers between September 2021 and November 2023.
Additionally, Starling discovered in early 2023 that its automated screening system had been incomplete since 2017, leading to potential sanctions breaches.
"Starling’s financial sanction screening controls were shockingly lax. It left the financial system wide open to criminals and those subject to sanctions. It compounded this by failing to properly comply with FCA requirements it had agreed to, which were put in place to lower the risk of Starling facilitating financial crime."
After addressing the issues and cooperating with the FCA, the bank received a 30% discount on its original fine of £40.96 million.
2. Citigroup Global Markets Ltd (fined £27.7m)
Breaches of PRIN 2 and 3 and MAR 7A 3.2
The FCA has fined Citigroup Global Markets Limited (CGML) £27.7 million following failures in their systems and controls, which led to the erroneous sale of $1.4 billion in equities across European markets.
In May 2022, a CGML trader intended to sell $58 million worth of equities but mistakenly created an order for $444 billion. Although CGML controls blocked $255 billion, $189 billion was processed and partially sold before the order was cancelled, causing a brief drop in European indices.
The FCA identified deficiencies in CGML's control framework, including the absence of a hard block to prevent such large erroneous orders and ineffective real-time monitoring. The firm's design allowed the trader to override alerts without proper review.
"These failings led to over a billion pounds of erroneous orders being executed and risked creating a disorderly market. We expect firms to look at their own controls and ensure that they are appropriate given the speed and complexity of financial markets."
CGML accepted the findings and settled, receiving a 30% discount on the fine, reducing it from £39.7 million. In addition to this, the Prudential Regulation Authority (PRA) fined CGML £33.9 million in May 2024 following its investigation into related issues.
3. Metro Bank plc (fined £16.6m)
Breaches of PRIN 3 and associated SYSC rules
The FCA has fined Metro Bank £16.68 million for failing to adequately monitor over 60 million transactions, worth more than £51 billion, for money laundering risks between June 2016 and December 2020.
Metro's automated monitoring system, implemented in 2016, had a flaw that excluded transactions made on the day accounts were opened and subsequent ones until records were updated.
Despite junior staff raising concerns in 2017 and 2018, the issue persisted until a partial fix in July 2019. Even then, Metro lacked a consistent mechanism to ensure all transactions were monitored until December 2020.
Since identifying the issue in 2019, Metro has improved its systems, but the FCA continues to oversee firms' crime prevention measures. The fine, originally £23.82 million, was reduced by 30% for Metro's cooperation in resolving the matter.
4. PricewaterhouseCoopers LLP (fined £15m)
Breach of Regulation 2 of the Financial Services and Markets Act 2000
The FCA has fined PricewaterhouseCoopers LLP (PwC) for failing to report suspicions of fraud involving London Capital & Finance plc (LCF) during its 2016 audit. This marks the first time the FCA has penalised an audit firm.
During the audit, PwC faced challenges, including aggressive behaviour from an LCF executive and the provision of misleading information. These issues, coupled with the complexity of the audit, led PwC to suspect fraudulent activity. Despite legal obligations to promptly report such suspicions to the FCA, PwC failed to do so.
While PwC eventually concluded LCF's 2016 accounts were accurate, it was still required to disclose its earlier concerns to the regulator but did not comply.
LCF entered administration in January 2019 after the FCA intervened over misleading mini-bond promotions, which misinformed thousands of investors about risks. The Serious Fraud Office continues to investigate LCF's collapse.
5. TSB Bank plc (fined £10.9m)
Breaches of PRIN 3 and 6
The FCA has fined TSB Bank £10.91 million for failing to treat customers in arrears fairly between June 2014 and March 2020. TSB also lacked adequate systems and controls to ensure fair outcomes, resulting in £99.9 million in redress to 232,849 affected customers.
TSB's processes created risks of unaffordable repayment plans and inappropriate fees. Staff training did not sufficiently prepare employees to assess customers' circumstances, and incentive schemes potentially encouraged prioritising the quantity of repayment plans over quality.
These shortcomings heightened stress and uncertainty for customers, including vulnerable individuals. An independent review initiated by the FCA in 2020 uncovered the extent of TSB's failings. While the bank identified potential issues in late 2016, meaningful corrective action only occurred after the review.
"TSB’s woeful systems and controls exposed its customers to risk of harm and meant it missed opportunity after opportunity to do the right thing. While it did take action, it took us instigating a review before it acted effectively to address all the issues."
TSB has since implemented a £105 million programme to address these problems and improve customer support processes.
6. HSBC UK Bank plc, HSBC Bank plc, & M&S Financial Services plc (fined £6.2m)
Breaches of Principles 3 and 6, CONC 7.2.1R, 7.3.4R, and 7.3.14R, and MCOB 13.3.2A
In May 2024, the FCA fined HSBC UK Bank plc, HSBC Bank plc, and Marks and Spencer Financial Services plc a total of £6.28 million for inadequate treatment of customers in financial difficulty.
In 2018, HSBC reported issues with their treatment of customers in arrears from June 2017 to October 2018 and commissioned an independent review. The FCA then required a skilled person review, which found unfair outcomes in 44% of the cases analysed, often involving vulnerable customers.
HSBC subsequently launched a remediation programme, investing up to £94 million to improve operations and governance and providing £185 million in redress to 1.5 million affected customers.
The FCA determined that HSBC breached principles related to responsible organisation and fair customer treatment, as well as specific regulatory requirements. This case underscores the importance of proper procedures, training, and governance when managing customers in financial difficulty.
7. Volkswagen Financial Services (UK) Limited (fined £5.4m)
Breaches of PRIN 3, 6, 7, CONC and DISP
The FCA has fined Volkswagen Financial Services (UK) Limited £5.4 million for failing to treat customers in financial difficulty fairly. Additionally, Volkswagen Finance will pay over £21.5 million in redress to approximately 110,000 customers affected by its shortcomings between January 2017 and July 2023.
The firm failed to assess customers' individual circumstances or provide tailored support, which, in some cases, led to repossessing vehicles from vulnerable customers without considering alternative solutions.
This disproportionately affected those relying on their cars for essential travel, such as commuting to work. These issues were exacerbated by poorly designed automated and templated communications.
The FCA's intervention led Volkswagen Finance to create a redress scheme, enhance staff training, improve communications, and introduce a new debt collection model. Volkswagen Finance will contact customers impacted directly with details about the compensation process.
8. CB Payments Limited (fined £3.5m)
Breach of Statement of Principle 2
The FCA has fined CB Payments Limited (CBPL), part of the Coinbase Group, £3.5 million for breaching restrictions on onboarding high-risk customers. CBPL had agreed to a voluntary requirement (VREQ) in October 2020 to halt onboarding high-risk customers while improving its financial crime controls.
Despite this, CBPL provided services to 13,416 high-risk customers. Around 31% of these customers deposited $24.9 million, which was later used for withdrawals and crypto transactions worth $226 million via other Coinbase entities.
The breaches occurred due to CBPL's failure to design, test, and monitor adequate controls for enforcing the VREQ, including overlooking potential onboarding pathways. These lapses went unnoticed for nearly two years, highlighting a lack of due care and diligence in ensuring compliance.
9. Steven Harbinder Singh Sahota (fined £1.7m)
Breaches of APER 1
The FCA has fined Steven Harbinder Singh Sahota £1.78 million and banned him from working in regulated activities after finding he acted dishonestly and without integrity.
As a discretionary fund manager at Beaufort Securities Limited (BSL), Sahota participated in a scheme that misled pension holders, causing substantial financial losses.
Due to Sahota's limited assets, the FCA agreed to waive the full penalty if he pays £10,000 to the Financial Services Compensation Scheme (FSCS), representing nearly all of his available funds.
10. Anthony Dale Cuming (fined £1.6m)
Breaches of APER 1
The FCA has fined Anthony Dale Cuming £1.69 million and banned him from performing any regulated financial activities after determining he acted dishonestly and without integrity.
As an independent financial adviser at Grosvenor Butterworth (Financial Services) Limited, Cuming participated in a scheme that misled pension holders, leading to substantial financial losses.
Given Cuming's limited assets, the FCA agreed to waive the full penalty if he pays £2,000 to the FSCS, which represents nearly all of his available funds.
11. Leigh Mackey (fined £1.1m)
Breaches of APER 1, APER 4 and COCON
The FCA has fined Leigh Mackey £1.1 million and banned him from working in financial services for misusing funds, misleading the regulator, and lacking honesty and integrity.
As the director and sole management controller of Inspire Insurance Services, an insurance broker for the construction sector, Mackey diverted premiums owed to insurers to cover Inspire's operating costs and his personal expenses over more than four years.
While Mackey admitted Inspire owed over £660,000 to insurers, the liquidator's report suggests the shortfall exceeds £2.2 million. Additionally, Mackey falsely claimed in regulatory reports that Inspire conducted client asset audits, which it did not.
Inspire entered liquidation in November 2020, and Mackey has since been declared bankrupt, leaving uncertainty about asset recovery. The FCA deemed him unfit to work in financial services due to the significant risk he poses to consumers.
12. Inspirational Financial Management (IFM) (fined £897k)
Breaches of Principles 3, 6 and 9
The FCA has fined Inspirational Financial Management (IFM) just under £900k after they had poorly advised people to transfer out of defined benefit (DB) pension schemes, including the British Steel Pension Scheme (BSPS).
During the period from June 2015 to December 2017, IFM allegedly failed to properly assess if pension transfers were in clients' best interests, with 83% of their advice not meeting regulatory standards. Upon investigation, the FCA found that Arthur Cobill and William Hofstetter had provided inadequate advice to clients regarding pension transfers, leading to significant financial losses.
Cobill and Hofstetter agreed to pay fines totalling £160,000 and were banned from providing pension transfer advice. Furthermore, with IFM undergoing administration, priority will be given to creditors to ensure adequate compensation for affected clients.
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