FCA fines may have dropped to their lowest level since the financial crisis, but that doesn’t mean the regulator hasn’t charged some eye-catching amounts in 2016.
Among the regulator’s 23 fines worth £22.2m, big names in the advice market like Aviva and Towergate took multi-million pound hits.
The sanctions range from money laundering failures and mishandling client money to payment protection insurance and platform oversight.
Mortgage Strategy’s sister magazine Money Marketing breaks down the biggest FCA fines in 2016:
5. WH Ireland Limited – £1.2m
The wealth manager was hit with a £1.2m fine in February for failing to addres market abuse issues.
The company’s corporate broking division was also prevented from taking on new clients for 72 days as the FCA found that between January and June 2013 the firm did not have proper controls in place to prevent market abuse being detected or occurring.
A “skilled person” review by the regulator gave WH Ireland a timeframe to rectify issues, but the firm was too slow to act on the deadline.
This meant that it had failed to ensure inside information did not leak, had inadequate personal account dealing rules for staff, failed to have a conflict of interest policy, and allowed inadequate post-trade surveillance systems.
4. CT Capital Limited – £2.4m
The seemingly never-ending tide of payment protection insurance complaints landed CT Capital, the parent company of a group of lenders and loan brokers, in hot water in June.
CT Capital sold around 31,000 PPI policies between 2005 and 2008, receiving £63m in commission as a result, but the FCA found it had not treated complaints properly.
The effect on 6,660 PPI complaints between May 2011 and November 2013 could have been “potentially significant” the regulator said, as CT Capital took 11 months to make the required changes to its processes to keep up with PPI complaint rules.
3. Towergate Underwriting Group Limited – £2.6m
Towergate managed to build up a shortfall of £12.6m in bank accounts meant to pay clients and insurers between June 2005 and December 2013, the FCA said as it fined the company £2.63m in July 2016.
Towergate settled early with the FCA, cutting its fine from £3.7m, but had previously failed to tell the regulator about a shortfall in client and insurer bank accounts it discovered in 2013 and was only repaid two years later.
There was no actual loss of client or insurer money, but that didn’t stop the FCA also fining former Towergate client money officer Timothy Philip £60,000 and banning him from having direct responsibility for client and insurer money.
2. Sonali Bank (UK) Limited – £3.3m
The FCA fined the UK arm of the Bangladesh-based bank £3.25m in October for failing to have adequate anti-money laundering systems in place over a four-year period.
The bank’s former money laundering reporting officer Steven Smith was also fined £17,900, as the regulator said it had flagged weakness in the bank’s anti-money laundering systems that went unchecked.
To pile on the pressure, the FCA also said Sonali Bank failed to properly carry out customer due diligence, identify politically exposed persons, and failed in its duty to file suspicious activity reports – even while under FCA investigation.
FCA director of enforcement and market oversight Mark Steward issued a scathing comment on the bank’s performance in the FCA’s judgement against it, saying there was “no excuse” not to follow the “abundance of guidance” on anti-money laundering from the regulator.
1. Aviva Pension Trustees UK Limited and Aviva Wrap UK Limited – £8.2m
October was a busy month for the regulator, as Aviva also became the unfortunate recipient of the first ever FCA fine for not having appropriate controls over outsourced providers to ensure client assets were protected.
At £8.24m, it was also the largest fine of the year, as Aviva’s adviser platform was found to lack the resources and expertise to detect or rectify client asset risks.
Though Aviva outsourced some management and administration services on the platform, the provider held its hands up in a note to advisers to admit its fault.
The note reads: “We take responsibility for this matter and have worked closely with the FCA to help address the issues that were identified.”