Hall of shame: the 10 biggest ever FSA fines

Barclays: £59.5 million

Barclays swept to the top spot of the Financial Services Authority (FSA)’s biggest ever fines list when it coughed up £59.5 million for misconduct relating to the Libor and the Euribor.

To rub salt in wound the bank was also hit with two fines in the US: $200 million by the Commodities and Futures Trading Commission and $160 million by the US Department of Justice.

The Libor scandal would lead to then Barclays chief executive Bob Diamond and chairman Marcus Agius both stepping down. Tracey McDermott, director of enforcement and financial crime, said: ‘Barclays’ misconduct was serious, widespread and extended over a number of years.’

JPMorgan Securities: £33.3 million

The largest single fine the Financial Services Authority (FSA) has imposed was a whopping £33.3 million levied onJPMorgan Securities in June 2010 for failing to protect client money.

The FSA fined the UK arm of the US investment bank for breaching its client money rules by failing to segregate $23 billion of client money from its futures and option business into ring-fenced accounts.

The penalty reflected the scale of the problem and the fact it had gone undetected for seven years, according to the FSA.

UBS: £29.7m

The most recent entry into regulator’s hall of shame, UBS was fined £29.7 million for systems and controls failings that allowed rogue trader Kweku Adoboli to amass losses of $2.3 billion (£1.4 billion).

The FSA said the failings revealed 'serious weaknesses in the firm's procedures, management system and internal controls'. The fine was discounted from £42.4 million as a result of early settlement.

The FSA and Swiss financial regulator Finma had announced a joint probe shortly after UBS revealed the losses. Adoboli was jailed for seven years after he was found guilty of two counts of fraud.

Goldman Sachs International: £17.5 million

Goldman Sachs International was fined £17.5 million in September 2010 after failing to inform the FSA it was under investigation by the US Securities & Exchange Commission (SEC) over the now-infamous Abacus collateralised debt obligation (CDO).

Goldman Sachs failed to inform investors – including Royal Bank of Scotland, which lost an estimated £523 million – that hedge fund Paulson & Co had helped to select the loans in the CDO and was betting against the housing market.

The FSA fine pales into comparison with the $550 million penalty the SEC imposed in the US on Goldman Sachs for its ‘incomplete’ marketing of the package of sub-prime mortgages.

Shell: £17 million

The third largest fine in the history of the FSA was surprisingly not levied on a financial services company but on oil company Shell.

Shell was fined £17 million in August 2004 for misleading investors for five years about the extent of its oil reserves. When the real figures were revealed, its share price dropped 7.5% and its market capitalisation fell £2.9 billion.

The FSA investigated several Shell employees who were instrumental in the market abuse, but dropped the case against them without taking action in November 2005.

Citigroup Markets: £13.9 million

The FSA fined Citigroup Global Markets £13.9 million in June 2005 for a trading strategy that disrupted the MTS fixed income trading platform. Citigroup bond traders made £9.9 million in less than an hour by selling the equivalent of an average day’s trading volume on the platform and then buying back when bond prices fell.

When applying the fine, Hector Sants, then managing director of wholesale business at the FSA, complained that Citigroup had executed a trading strategy without considering the risks and consequences for the marketplace.

Card Protection Plan: £10.5m

The FSA issued its joint largest fine over retail activities of £10.5 million to credit card insurer Card Protection Plan (CPP) for mis-selling insurance products.

The FSA said it had discovered widespread mis-selling of CPP's two main products, card protection and identity protection, between January 2005 and March 2011.

The regulator said CPP had emphasised its card protection product would provide consumers with up to £100,000 of insurance cover, when they were already covered by their banks, and that it overstated the risks and consequences of identity theft in selling its identity protection product.

HSBC: £10.5 million

Nearly a year ago now, the FSA slapped HSBC with a fine of £10.5 for inappropriate investment advice, as provided by one of its subsidiarises, NHFA.

Between 2005 and 2010, NHFA advised more than 2,000 elderly customers to invest in asset-backed investment products, typically investment bonds.These types of investments are normally recommended for a minimum period of five years, whereas in many cases those advised were already in long-term care.

Blackrock: £9.5 million

Blackrock, only just making it into the FSA's hall of shame, was issued with a £9.5 million fine for client money failures.

Between October 2006 and March 2010, the Investment Management arm of Blackrock failed to put trust letters in place for money market deposits in third party banks. It also failed to take reasonable care to organise and control its affairs in relation to the identification and protection of client money.

Coutts: £8.8 million

Serious and systemic failings down at Coutts led to an £8.75 million telling off, for failing to establish and maintain effective anti-money laundering systems and controls relating to high risk customers.

This all came about after a visit by the regulator in 2010 revealed that Coutts did not apply robust controls when dealing with high-risk or politically exposed persons.