FCA Steps Up Fight Against Financial Crime, Records Surge in Criminal Charges and Revoked Approvals

The UK’s Financial Conduct Authority (FCA) has intensified its battle against financial crime, filing a record number of criminal charges and significantly increasing the number of firms stripped of regulatory approval. According to the FCA’s latest annual report, while enforcement activity has surged, the total fines collected dropped to £35.3 million—down from £212.6 million the previous year, marking the lowest figure in over a decade.

Despite the reduction in fines, the regulator has expanded its workforce and ramped up operational spending to enhance its enforcement capabilities. FCA CEO Nikhil Rathi stressed the importance of balancing financial oversight with fostering innovation in the UK’s financial sector.

“If we want the UK to maintain its international competitive edge, we need to be bold and accept that not every failure can or should be prevented,” Rathi said.

This push aligns with the UK government’s new mandate requiring the FCA to support the country’s economic growth and global competitiveness. The FCA has also been vigilant in monitoring crypto asset firms, rejecting 87% of applications from companies seeking approval for their anti-money laundering (AML) measures. Furthermore, 450 consumer alerts were issued in just three months following stricter regulations aimed at curbing misleading crypto marketing.

FCA Chair Ashley Alder commented on the agency’s approach, stating, “We are mindful of the need to strike the right balance between compliance obligations and ensuring we remain assertive and agile in addressing potential harm.”

The FCA’s crackdown on financial crime led to its highest-ever number of criminal charges, with 21 individuals charged over the past year, compared to just one the previous year. The agency also secured 11 successful prosecutions and opened 837 financial crime cases, up from 613 in the previous period. However, the number of fraud-related cases dropped significantly from 2,013 to 1,039.

White-collar crime expert Natalie Sherborn from the law firm Withers acknowledged the FCA’s increased efforts but noted, “for many, these numbers will still seem disappointingly low. There is clearly more work to be done.”

In addition to criminal prosecutions, the FCA doubled the number of firms stripped of their regulatory authorizations. A total of 1,261 companies lost their approvals in the past year, as the FCA continues to swiftly identify and remove firms that fail to meet its minimum standards, aiming to strengthen confidence in the financial markets.

The FCA’s report also emphasized its recruitment drive, which saw the addition of nearly 1,000 new employees, boosting staff numbers by 17.5% to almost 5,000. The regulator has faced challenges with staff morale, but turnover improved to 9.9%, down from 17.5% the previous year.

Despite investments in technology and a 6.8% average pay raise for staff, total costs rose by £92 million to £761.7 million, contributing to a £44.8 million deficit. Rathi, who received a 4.1% pay increase to £530,000, said the FCA continues to make “great strides” in transforming its operations.

By fLEXI tEAM