This enforcement data shows the enforcement action we took in 2020/21 and it forms part of our Annual Report.
Overview of enforcement action
In 2020/21, we issued 134 Final Notices (119 against firms and individuals trading as firms and 15 against individuals), secured 147 outcomes using our enforcement powers (144 regulatory/civil and 3 criminal) and imposed 10 financial penalties totalling £189.8 million.
Chart tips: hover over data series to view the data values and filter the data categories by clicking on the legend.
Chart
Data table
Figure 1 shows the total amount of financial fines imposed in 2020/21 compared to previous years. The total amount of fines decreased by 15% from £224.4 million in 2019/20 to £189.8 million in 2020/21. The total amount of fines in 2019/20 decreased slightly by 1% from £227.3 million in 2018/19.
In 2020/21 the largest single fine was for £64 million million against Lloyds Bank plc, Bank of Scotland plc and The Mortgage Business plc. In 2019/20 the largest was for £102.2 million against Standard Chartered Bank, and in 2018/19 the largest was for £76 million against Stewart Owen Ford.
Table 1: Financial penalties imposed
|
|
2018/19 |
2019/20 |
2020/21 |
|---|---|---|---|
|
Number imposed |
16 |
15 |
10 |
|
Total value |
£227.3m |
£224.4m |
£189.8m |
|
Number imposed against firms |
8 |
12 |
8 |
|
Total value imposed against firms |
£147.1m |
£224.1m |
£189.6m |
|
Number imposed against individuals |
8 |
3 |
2 |
|
Total value against individuals |
£80.2m |
£0.3m |
£0.2m |
Transparency
To support our commitment to being a transparent regulator, we provide details of the length and cost of our enforcement activities (based on cases that closed in the year).
Regulatory and civil cases
Case length
Contested cases take a significantly longer time to resolve than settled cases. The timeframes below are inclusive of civil or criminal trials and any resulting appeals, the timing and scheduling of which are not in the control of the Financial Conduct Authority.
Table 2: Average length of regulatory and civil cases
|
Year |
Average length of cases resolved by agreement (months) |
Average length of cases referred to RDC (months) |
Average length of cases referred to Tribunal (months) |
Average length of all cases, including NFA cases (months) |
|---|---|---|---|---|
|
2018/19 |
29.1 |
50.8 |
74.1 |
17.5 |
|
2019/20 |
37.4 |
53.5 |
57.0 |
23.9 |
|
2020/21 |
32.6 |
47.2 |
120.1* |
24.7 |
Table 2 shows the average length of time civil and regulatory cases taken from the date we began the investigation to the date of closure, whether it was resolved by agreement, referred to the Regulatory Decisions Committee (RDC) or Tribunal, or closed with no further action (NFA).
* Figure relates to one case that was subsequently appealed to the Court of Appeal and subject to a costs application.
Case costs
Table 3: Average cost of regulatory and civil cases
|
Year |
Average cost of cases resolved by agreement (£000s) |
Average cost of cases referred to RDC (£000s) |
Average cost of cases referred to Tribunal (£000s) |
Average cost of all cases, including NFA cases (£000s) |
|---|---|---|---|---|
|
2018/19 |
£195.2 |
£253.5 |
£447.3 |
£103.4 |
|
2019/20 |
£341.6 |
£748.8 |
£601.8 |
£229.0 |
|
2020/21 |
£365.7 |
£597.6 |
£826.7 |
£165.1 |
Table 3 shows the average cost of our civil and regulatory cases. The resource required for each case varies depending on factors including scale and complexity. The cost of regulatory cases we have conducted can range from around £2,000 to over £2m.
Criminal cases
Case length
Table 4: Average length of criminal cases
|
Year |
Average length of criminal cases in the wholesale area |
Average length of criminal cases in the Unauthorised Business Department (UBD) area |
Average length of all criminal cases |
|---|---|---|---|
|
2018/19 |
126.0 |
25.7 |
75.9 |
|
2019/20 |
N/A |
N/A |
N/A |
|
2020/21 |
29.8 |
29.0 |
29.2 |
Table 4 shows the average length of time for a criminal case. Criminal cases can take significantly longer to resolve than regulatory cases.
No criminal cases were closed in the 2019/20 period.
Case costs
Table 5: Average cost of criminal cases
|
Year |
Average cost of criminal cases in the wholesale area |
Average cost of criminal cases in the UBD area |
Average cost of all criminal cases |
|---|---|---|---|
|
2018/19 |
£14342.7 |
£122.0 |
£7232.4 |
|
2019/20 |
N/A |
N/A |
N/A |
|
2020/21 |
£513.4 |
£139.6 |
£264.2 |
Table 5 shows the average cost of our criminal cases. Generally, we pursue fewer criminal cases in comparison to regulatory action. But the costs for individual criminal cases can be significantly higher than regulatory cases.
No criminal cases were closed in the 2019/20 period.
Chart
Data table
Figure 2 shows the number of cases opened and cases closed in 2020/21 compared with 2019/20 and 2018/19, and the total number of open cases (ie work in progress) as at the end of each financial year for those 3 years. Opened cases decreased by 46% from 343 to 184 between 2018/19 and 2019/20 and decreased by 27% to 134 in 2020/21. Closed cases decreased slightly by 2% from 189 to 185 between 2018/19 and 2019/20 and increasing slightly by just 1% to 186 in 2020/21. Open cases remained virtually flat decreasing by just 1% from 650 to 645 between the end of 2018/19 and the end of 2019/20 and decreased by 8% to 593 at the end of 2020/21. Overall, the higher number of closed cases compared to opened cases in the year resulted in a net reduction in total number of open cases.
Table 6: Case movements
|
Type of case |
Open at 1 April 2020 |
Opened during year |
Closed during year |
Open at 31 March 2021 |
|---|---|---|---|---|
|
Retail conduct |
129 |
28 |
54 |
103 |
|
Advice – pensions |
65 |
4 |
11 |
58 |
|
Pensions scam |
15 |
1 |
2 |
14 |
|
Investment scam |
14 |
3 |
4 |
13 |
|
Retail lending |
9 |
4 |
2 |
11 |
|
Financial crime |
71 |
4 |
21 |
54 |
|
Wholesale conduct |
48 |
7 |
14 |
41 |
|
Insider dealing |
87 |
33 |
48 |
72 |
|
Market manipulation |
29 |
3 |
15 |
17 |
|
Listing/Prospectus Rules/DTR Breaches |
7 |
0 |
3 |
4 |
|
Misleading statements |
29 |
6 |
5 |
30 |
|
Unauthorised business |
142 |
41 |
7 |
176 |
|
Totals (excluding TCT cases) |
645 |
134 |
186 |
593 |
Cases may involve multiple parties and include both firms and individuals.
We have restated open cases at 1 April 2020 from 646 (as originally stated in the 2019/20 Annual Report) to a net figure of 645 to reflect the removal of 2 cases opened in error and the addition of a sensitive case that was previously omitted. The type of case reflects the primary issue under investigation. A small number of ongoing cases have been reclassified. TCT (Threshold Conditions Team) cases involve regulated firms that fail to meet the FCA’s minimum standards ie Threshold Conditions.
Chart
Data table
Figure 3 shows the number of outcomes publicised in 2020/21, by type of outcome, compared with previous years. In 2018/19 there were 238 cancellation of permissions or withdrawal of approvals published. This represents 82.6% of the total outcomes for that year (288). In addition, there were 12 criminal outcomes (4.2%), 16 fines (5.6%), 20 prohibitions (6.9%), and 2 suspension/restrictions (0.7%).
Chart
Data table
This compares to 2019/20 where there were 176 cancellation of permissions or withdrawal of approvals published. This represents 81.1% of the total outcomes for that year (217). In addition, there were 9 criminal outcomes (4.2%), 15 fines (6.9%), 4 civil outcomes (1.8%), 1 public censure (0.5%), and 12 prohibitions (5.5%).
Chart
Data table
This compares to 2020/21 where there were 107 cancellation of permissions published. This represents 72.8% of the total outcomes for the year (147). In addition, there were 3 criminal outcomes (2.0%), 10 fines (6.8%), 6 civil outcomes, including restitution orders made by Court (4.1%), 5 public censures (3.4%), 15 prohibitions (10.2%), and 1 restitution scheme (0.7%).
The majority of cancellation of permissions outcomes relate to consumer credit firms failing to pay fees or submit regulatory returns.
Threshold Conditions
Firms and individuals must meet at all times certain minimum standards (the Threshold Conditions for firms and the Fit and Proper test for individuals) in order to continue to be authorised by the FCA. We take action against firms and individuals that do not meet such criteria. This year, we cancelled 107 firms' permissions to conduct regulated business, and prohibited 10 individuals.
Table 7: Threshold Conditions cases in 2020/21
| Threshold Conditions Team (TCT) cases |
Open at 1 April 2020 |
Opened during the year |
Closed during the year |
Open at 31 March 2021 |
|---|---|---|---|---|
|
Financial Services and Markets Act 2000 (FSMA) firm cases |
71 |
43 |
80 |
34 |
|
Payment Services Directive firms |
9 |
16 |
16 |
9 |
|
Consumer Credit firms |
292 |
556 |
703 |
145 |
|
Money Laundering / Second Money Laundering Directive firms |
4 |
15 |
7 |
12 |
|
UK Listing Authority firms |
1 |
0 |
1 |
0 |
|
Claims Management |
0 |
1 |
0 |
1 |
|
TCT cases total |
377 |
631 |
807 |
201 |
We have restated open cases at 1 April 2020 from 369 (as originally stated in the 2019/20 Annual Report) to 377 to reflect the addition of 8 Consumer Credit cases that were previously omitted in error.
Case Study - Mark Horsey
In November 2020, we prohibited Mr Horsey following his being convicted of a sexual offence. Mr Horsey had committed a gross breach of trust and abuse of his position of power as a landlord. He had carefully rigged one of his properties to enable him to surreptitiously observe and record his tenant’s use of the property’s bathroom.
Mr Horsey’s case formed part of a broader collection of ‘non-financial misconduct’ cases in which we prohibited financial advisers whose criminal convictions, albeit arising from their affairs outside of their regulated activities, nonetheless demonstrated a severe lack of integrity causing them to fall short of our Fit and Proper criteria.
We consider that financial advisers who demonstrate a propensity to abuse their position of power pose an inherent significant risk to the consumers they advise.
For more information see our Final Notice[1].