At a conference (Practising Law Institute Sixteenth Annual Institute of Securities Regulation in Europe) today Mark Steward, FCA Director of Enforcement and Financial Crime, made a number of comments on fines, conduct of financial services firms and senior managers need to take responsibility for their actions as well as exercise meaningful oversight of what goes on in their firms.
Mr Steward made the point that there is no policy intention towards fewer large fines. He said that financial penalties and sanctions need to fit the crime, taking into account all mitigating factors.
He also went on to say that what happens in the future in terms of enforcement activity and related fines, depends on what happens in the market rather than any fad or change in approach by FCA. The FCA will use the full range of it’s powers where misconduct is found.
Mr Steward also pointed out that the penalty must fit the crime, and that the measure of enforcement is not the aggregate level of fines. He said that enforcement is in public interest and there are number of elements to this: detecting misconduct as early as possible, investigating fairly, and in ensuring justice for those affected by consequences of misconduct.
Mr Steward said that the only protection against high fines is good conduct and the avoidance of misconduct that would otherwise justify those sanctions.
He concluded by saying that firms must continue to up their game, find ways to overcome the inherent reluctance to accept responsibly. Senior managers need observable evidence that they are thoughtful, apprehend consequences of their actions, have a sense of duty and possess insight into what should be done, and have compulsion to set about doing that right thing.