The Financial Conduct Agency (FCA) has been busy since its formation on 1 April 2013. The FCA supersedes the FSA and, as the name suggests, will focus more on conduct. The regulation of the banking industry will reside with the newly formed Prudential Regulation Authority. Recent FCA enforcement action includes:
- Eight men being charged in relation to land banking;
- Fining the UK subsidiary, EFG Private Bank Ltd, of the Swiss banking group EFG International £4.2 million for failing to take “reasonable care to establish and maintain effective anti-money laundering controls” for wealthy customers. These failings are said to be “serious and lasted for more than three years.” The FCA found that the risks highlighted in a sample of EFG’s files related to allegations of criminal activity or that the customer had been charged with criminal offences including corruption and money laundering. EFG was found to have failed to appropriately monitor its higher risk accounts. EFG follows the likes of Coutts (fined £8.75 million) and the Swiss owned Habib Bank AG Zurich (fined more than £500,000 in 2012) to have been fined by the FCA for similar breaches of anti-money laundering controls. Tracey McDermott, head of enforcement and financial crime, reiterated that whilst EFG’s policies “looked good on paper, in practice it manifestly failed to ensure that it was addressing its anti-money laundering risks”;
- On 30 April 2013 the FCA arrested two individuals for alleged insider dealing and market abuse. Whilst the names have not yet been confirmed it has been widely speculated that one of the suspects is/was a city professional working for a large fund or asset manager. These arrests continue a crack down on insider trading and market abuse offences begun by the FSA and fits into the broader pattern of scrutiny of hedge fund asset managers by the FCA.