Record year for fines by UK markets watchdog

Fines levied by the UK markets watchdog nearly tripled during 2010 to a record £89m (€104m) as the regulator stepped up enforcement action in the wake of the financial crisis.

The Financial Services Authority (FSA) imposed the largest fines in its history on JP Morgan and Goldman Sachs, while it also banned 60 people from working in the financial sector.

The figure for penalties, which was disclosed in the Financial Times, compares with £35m (€41m) in 2009 and come as the FSA prepares for its own dissolution with the creation of the planned Consumer Protection and Markets Authority.

The UK is still well behind the United States, where fines for big groups routinely run above $500m (€378m).

JP Morgan set the UK record in June when it paid £33.3 (€39m) for failing to keep client money in separate accounts, while Goldman was fined £17.5m (€20.5m) for regulatory control failings that led the investment bank to neglect to tell the FSA that it was under investigation by US authorities.

However, critics believe the FSA’s focus on large fines is unhealthy. Nathan Willmot, partner at Berwin Leighton Paisner, said: “The regulator continues to be obsessed with how its enforcement cases will play out in the media.”