In a Final Notice issued on 22 January 2015, the FCA fined David Caplin, former chief executive of Martins, £210,000 (Stage 1: 30% discount) and prohibited him from performing any significant influence function. On the same date, the FCA issued a Final Notice to Jeremy Kraft, former compliance officer at Martins, who was fined £105,000 (Stage 1: 30% discount) and similarly prohibited. The FCA concluded both Mr Caplin and Mr Kraft failed to ensure the adequacy of the firm’s systems and controls that contributed to allowing Martins to engage in LIBOR manipulation. The FCA previously fined Martins on 15 May 2014 for its role in LIBOR manipulation for £630,000 (Stage 1: 30% discount); this fine having been previously reduced by 75% owing to Martins’ financial circumstances.
These represent the FCA’s first enforcement cases in which individuals holding significant influence functions have been fined for failings that contributed to LIBOR misconduct. The FCA noted “This case and other recent Significant Influence Function (SIF) outcomes should serve as a warning to everyone that holds a significant influence function that if a firm’s misconduct can be attributed to cultural failings, then we expect senior management to answer for this.” The regulatory focus on the compliance function seems set to stay.