In the first of a series of shorter posts today, we will react to the news that Goldman Sachs has been handed a financial penalty by the FCA for misrepresenting a vast number of transactions over the past decade. In the largest fine of its kind ever given out by the regulator, the FCA has fined Goldman’s London Unit £34.4 million for ‘ failing to provide accurate and timely reporting relating to 220.2 million transaction reports between November 2007 and March 2017 ’. Because Goldman agreed to resolve a proportion of the issue – issues relating to the firm’s change management processes and its maintenance of counterparty reference data – the figure of £43.4 million is actually a reduction on what should have been a £49 million fine. The firm is guilty of not complying with the rules of the Markets in Financial Instruments Directive , or MiFID, and is the second such action taken against a bank by the FCA in less than a month after UBS was fined £28 million for the same thing. I...

As is the remit of Financial Regulation Matters , it should not be surprising that analysing financial regulators is of key concern for this blog. In doing that, however, we get to see the diverging experiences of a financial regulator, and how differing approaches yield very different results. We have examined a number of regulators throughout the years in this blog, and two have factored heavily in our analyses. Today, we revisit the two particular stories which have evolved recently and left the respective regulators facing a number of criticisms. The SFO’s Pursuit of Tesco Directors Fails We examined the case of the Serious Fraud Office (SFO) launching proceedings against three Tesco Executives back in February. Then we discussed how the SFO were alleging that fraud by abuse of position, and false accounting were the crimes of Carl Rogberg, John Scouler, and Christopher Bush. That post asked whether the SFO would continue in their pursuit, and shortly afterwards it was ...

In 2017, this author produced an article that examined the potential regulatory framework that exists in the UK where Credit Rating Agencies are concerned ( later published in 2018 ). We spoke about this issue here in Financial Regulation Matters , where we discussed how there may be a need to incorporate sole regulatory responsibility within one of the regulatory bodies should the UK be unable to come to a ‘deal’ with their EU partners. As part of the EU (Withdrawal) Act, the Government has recently come to a decision regarding which body would be responsible for regulating the CRAs in the wake of a no-deal Brexit, and it confirms the findings of the article. However, it is worth revisiting this developing story to examine what the consequences of such a decision may be. It has been decided, as the original article produced by this author predicted, that the Financial Conduct Authority would be the regulatory body charged with supervising the credit rating industry , should th...

We have spoken here in Financial Regulation Matters of the potential for a regulatory race-to-the-bottom in the post-Brexit era. With the U.K. choosing to go out into the economic landscape on its own, the potential for a weakening of regulatory protection to encourage foreign trade and investment is tremendous, and hardly a surprise. Yet, the FCA, as one of the fundamental elements in the regulatory framework that governs the U.K., has no option but to refute any suggestion that the framework will be weakened as a result of Brexit. In this post, we shall examine their latest insistence on the back of what were very telling declarations by leading British politicians. Speaking on a recent visit to Tokyo, the Economic Secretary John Glen told his audience that ‘ we will do whatever it takes to keep the UK as a global hub for financial services and to maintain the City of London as an asset for Europe ’. This follows on from Theresa May telling the UN Summit in New York recently ...

Previously in Financial Regulation Matters we have discussed the issue of whistleblowing, mostly in relation to the case of Barclay’s CEO Jes Staley ( here and here ). We know that the FCA faced criticism for not suspending Staley in that case, so today’s news that the regulator are looking into the conduct of Royal Bank of Canada (RBC) has brought the issue to the forefront once more. In today’s post we will review this news and look at what whistleblowing actually means, and its ‘function’ in a much broader sense. The case with RBC has accelerated after a former trader recently won his case against the bank for unfair dismissal. The claim, relating to the trader’s revelations regarding the ‘box-ticking’ culture that was/is prevalent within the firm , concluded with the judge describing the bank’s conduct as ‘egregious’ and that, ultimately, ‘employers should take better care of whistleblowers even if they find them somewhat enervating’. Whilst the FCA has not confirmed the ...

In Financial Regulation Matters we have covered the story of the disgraced GRG unit within RBS from the moment that the scandal was publicised, and recently that case has taken a particularly disappointing turn. In other news from the Banking sector, Lloyds have been forced to set aside even more money to cover PPI claims made against them, bring the prospective to total to more than £19 billion. In this post, we will assess these stories and examine what they may mean for the continuing lack of trust that the public have in the Banking sector. Starting with RBS, the bank have been in the midst of a number of legal claims regarding the conduct of its infamous GRG unit, which was set up to ‘help’ Small and Medium Enterprises (SMEs). Last month the bank managed to fend off a claim from a Real Estate group regarding the mis-selling of interest rate swaps and manipulated interest rate benchmarks, and a couple of days ago managed to fend off a claim in the High Court from an SME ...

The Financial Conduct Authority (FCA), one of Britain’s primary financial regulators, has featured heavily within Financial Regulation Matters , for obvious reasons. However, a lot of the recent posts focusing on the regulator have been concerned with its approach to the unfolding scandal at RBS, with its role in the publication of a damning report drawing attention most recently. However, recently there have been suggestions that the regulator has ‘ gone soft ’ in its approach to the regulated, with the RBS debacle being cited as the most compelling evidence for the regulator’s approach. In this post, these accusations will be assessed against the evidence, with a larger question being asked with regards to both the role of the regulator in the larger picture, and its willingness to take action. The decision by the FCA to commission, and then refuse to release a damning report into the operations of RBS and its treatment of small and medium enterprises (SMEs), has caused outra...

Before this post starts with any preamble, it is important to note a couple of things. Firstly, this post will not be covering the issue in tremendous depth, mostly because the issue is so large that to attempt to do so in this forum would not do the issue any justice at all – there are many fabulous campaigners that do the issue tremendous justice on account of their continuous and tireless campaign against what is now confirmed as being a systemic issue (see @Spandavia and @Ian_Fraser for just two excellent examples of this). The second thing to note is that the report, which we will focus on in this post, is particularly extensive and requires a thorough examination (the report can be found here ). With those aspects acknowledged, what this post will do is look at some of the ramifications from the report, the scenario within which it was released (which is a remarkable story in itself), and also what it potentially tells us about the relationship between the regulator and t...

In the first of two posts today that focus on the banking sector, we will start by looking at the troubled bank RBS. We have looked at RBS on a large number of occasions here in Financial Regulation Matters , with posts ranging from its incredible losses since the Crisis, the bank trying desperately to keep its high-ranking officials (mostly former) out of the court room , and also its appalling treatment of SMEs . In continuing the first and third areas of focus, news recently adds developments to these stories which detail a bank on its knees. However, by adjoining these analyses with the examination of the Government, its regulators, and also Parliamentary committees, the bank’s future comes into focus and is, seemingly, in a particularly precarious phase for a number of reasons. Looking first at the issue regarding the bank’s treatment of SMEs, via its notorious ‘Global Restructuring Group’, we are no strangers here in Financial Regulation Matters to the developments in th...

Today’s post acts as a small review of two specific news pieces that broke today concerning two financial regulators in the U.K. Whilst one would have had to have been quick to spot these stories, with both falling down the list of financial news stories rather quickly, each has particularly strong knock-on effects, but for differing reasons. So, in this post, a little more detail will be added as both of those stories represent the latest iterations of themes that have formed the basis of a number of posts here in Financial Regulation Matters . The first story is concerned with the infamous report conducted by the FCA regarding the actions of RBS and its ‘Global Restructuring Group’ (GRG). We have covered this issue on a number of occasions, and heard most recently that whilst the FCA has been busy investigating and punishing a number of firms of their failures, firms like BrightHouse and Equifax, their hesitancy to take any serious action against RBS has garnered plenty of jus...

Today’s post can be seen as somewhat of a ‘round-up’ of recent news concerning the Financial Conduct Authority (FCA). With the FCA featuring considerably in the news recently – amid the obvious cries of ‘what’s new!’ – it is worth discussing these particular elements for the purpose of asking some abstract, potential philosophical questions like ‘what is the role of the regulator in reality ?’. The FCA has figured heavily already here in Financial Regulation Matters , particularly in relation to the regulator’s actions with regards to the ever-increasing debt bubble , and also the conduct of RBS a. in general and b. in relation to the ‘ controversial ’ i.e. potentially criminal ‘ Global Restructuring Group ’ and its systemic destruction of many small businesses. So, in furtherance of these analyses, the following provides ‘updates’, for want of a better term, to the developing progression of the FCA as a leading regulator in the U.K. There are a number of stories recently that ...