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The FSA fines which rocked financial services in 2012
by Louisa Minter-Kemp on Dec 21, 2012 at 09:12
There was little Christmas spirit at the City watchdog as it doled out record fine to UBS for Libor manipulation earlier this week. This was one of a number of penalties imposed over the year in which the financial services industry was hit for millions.
PWC was hit with a record £1.4m fine for audit misconduct
Date: 6 Jan
Regulators were given a £1.4 million fine on Pricewaterhousecoopers (PwC) for claiming money was appropriately looked after by JP Morgan Securities over a seven year period. The fact PwC accepted its conduct had fallen short of the standards reasonably expected saw the fine imposed reduced from £2 million to £1.4 million.
FSA doled out £2.17m for double RBS insurer failings
Date: 18 Jan
FSA handed out a £2.17 million fine to Direct Line and Churchill after ruling the two Royal Bank of Scotland (RBS) owned insurers failed to conduct their businesses with 'due care, skill and diligence'. 27 out of 50 complaint files were altered improperly before they were submitted at the request of the FSA for review.
FSA fine US hedge fund giant £7.2m for insider trading
Date: 25 Jan
The FSA fined David Einhorn, owner of Greenlight Capital, £7.2 million for engaging in market abuse concerning an anticipated significant equity fundraising by Punch Taverns. Einhorn individually had to pay around £3.6 million of the total fine. The information he exchanged resulted in Greenlight reducing its holding in Punch from 13.3% to 8.89%, thus meaning Greenlight avoided losses of approximately £5.8 million.
Greenlight Capital and JP Morgan Cazenove traders fined £195k
Date: 27 Jan
The FSA hit Alexander Ten-Holder, former officer at Greenlight Capital, with a £130,000 fine. This was for failing to question and make reasonable enquiries before selling Greenlight’s shareholding in Punch Taverns ahead of an anticipated significant equity rising in 2009. The watchdog also fined Casper Agnew, director at JP Morgan Cazenove, £65,000 or failing to identify and act on a suspicious order from Greenlight.
FSA fine ex JC Flowers UK CEO Sinha £2.9m
Date: 31 Jan
The FSA fined Ravi Shankar Sinha £2.867 million for fraudulently obtaining £1.367 million from a company owned by a private equity fund advised by JC Flowers, the penalty consisting of £1.367 million disgorgement and a punitive element of £1.5 million. FSA said that Sinha borrowed heavily in order to finance investments where performance declined and this left him unable to service his debt.
FSA fine ex Merrill Lynch broking boss £350k for insider dealing
Date: 16 Feb
FSA fined Andrew Osborne, former managing director of corporate broking at Merrill Lynch, £350,000 for market abuse by disclosing inside information ahead of a significant equity fundraising by Punch Taverns. The FSA said that his actions undermined the orderliness and integrity of the market as he was trusted as the ‘gatekeeper’ of inside information.
FSA fine Santander £1.5m for structured product failings
Date: 20 Feb
Santander was fined £1.5 million by FSA, after failing to confirm under which circumstances its structured products would be covered by the Financial Services Compensation Scheme (FSCS). Its two products; Guaranteed Capital Plus and the Guaranteed Growth Plan, would be covered by the FSCS were limited and new customers were not informed of this cover.
Coutts fined £8.75m for ‘serious failings’
Date: 26 Mar
The FSA fined Coutts and Company £8.75 million for failing to establish effective anti-money laundering systems and controls relating to high risk customers. The FSA added Coutts agreed to settle at an early stage and so qualifies for a 30% discount, otherwise the fine would have been £12.5m. Last year Coutts was fined £6 million for mis-selling AIG-related products.
JP Morgan Caz markets chair quits after market abuse fine
Date: 3 Apr
The FSA fined JP Morgan Cazenove Capital Markets chair Ian Hannam £450,000 for market abuse. The regulator published a decision notice setting out its reasons for fining Hannam, which include the disclosure of inside information in two emails sent in September and October 2008 to a prospective client. The FSA said the emails contained inside information relating to Heritage Oil, an existing JP Morgan client for which Hannam was the lead adviser.
FSA banned and fined insurance chiefs £3.5m
Date: 8 May
The FSA had banned and fined an insurance firm £3.5 million. The City watchdog said Mitsui Sumitomo Insurance Company had a penalty of £3,345,000, with it imposing a ban and fine of £119,303 on its former executive chairman.
Martin Currie hit by £8.6m regulatory fine for China failings
Date: 10 May
Martin Currie was fined £3.5 million and $8.3 million, by the FSA and US Securities Exchange Commission (SEC) over unlisted investments the firm made in China in 2007. Assets in the firm had slipped from around £11 billion to £5 billion since the disclosure was made. The firm had been in the middle of a reconstructing process, focusing on emerging markets, as well as alternative ucits products. They also announced new financial banking, adding £26 million, with the firm saying it would take the company to 300% of its capital ratio requirements.
FSA fined Scottish broker £335k for fraud
Date: 11 May
The FSA fined Scottish broker Donald McKee Morgan £335,204 for committing insurance fraud. The FSA found he kept insurance premium payments from a number of the firm’s clients, deceiving them out of almost £400,000. Morgan’s penalty consists of a punitive element of £112,700 and £222,504, the FSA also fined.
FSA fined Swiss private bank £525k for money laundering failings
Date: 15 May 2012
FSA hit Habib Bank with a £525,000 and its former reporting officer £17,500 for ineffective anti-money laundering systems. The City watchdog said half its deposits came from jurisdictions which had less stringed AML requirement, or were perceived to have higher levels of corruption than the UK.
FSA fine ex-UBS advisers £1.3m for rogue trading
Date: 21 May 2012
FSA has fined former UBS advisors; Sachin Karpe £1.2 million and Laila Karan £75,000. Karpe’s scheme, carrying out unauthorised trading, resulted in substantial losses for 21 customers and UBS has since paid compensation to the affected customers in excess of $42 million. They have both been banned from performing any role in regulated financial services.
FSA hit hedge fund CEO with £3m fine
Date: 29 May 2012
Alberto Micalizzi, CEO and a director of Dynamic Decisions Capital Management, was fined £3 million by FSA, for not being fit and proper. This was due to the company’s losses of over $390 million, 85% of its value, between October 2008 and December 2008.
Regulators hit Barclays with £290m fine for Libor failings
Date: 27 June
UK and US regulators fined Barclays Bank with £290 million for significant failings in relation to Libor and Euribor; the FSA fined them £59.5 million for misconduct, while the US regulators also imposed a penalty of $200 million for attempted manipulation and false reporting charges. Barclays had agreed to pay a penalty of $160 million.
FSA fines & bans 'neither competent, capable or qualified' adviser
Date: 30 Jul
City regulator the FSA fined and banned adviser Adrian Mark Mosley for misleading clients. The FSA said that Mosley has been served with a £10,500 penalty and been prohibited from holding a significant influence function or acting as a sole trader after it was found he that he failed to properly research companies for investors, asked them to sign waivers on advice and did not assess adequately customers' personal and financial circumstances.
FSA fines Turkish Bank £300k for money laundering failings
Date: 2 Aug
The FSA fined Turkish Bank £294,000 for breaching the regulations on money laundering, such as failing to establish and maintain appropriate and risk-sensitive anti-money laundering policies and failing to carry out adequate due diligence on the respondent banks it dealt with.
FSA fines BlackRock Investment Management £9.5m
Date: 11 Sep
BlackRock Investment Management has been fined £9.5 million by FSA, for failing to protect client money such as failing to put trust letters in place and failing to control its affairs responsibly. This affected the average daily balance by over £1.36 billion, had the firm become insolvent at any time during this period, clients would have suffered delay in securing the return of their funds.
FSA banks and fines former HBOS executive director
Date: 12 Sep
The FSA fined Peter Cummings £500,000 for management failings and the banning of him from holding any senior position in a UK bank, building society, investment or insurance firm. The FSA said it intended to publish a report into the collapse of HBOS during the peak of financial crisis.
Swiss hedgie fined £900,000 for market manipulation
Date: 28 Sep
A Swiss-based hedge fund manager, Stefan Challigne, was fined £900,000 along with his former senior salesman, Patrick Sejean, with £650,000, for market manipulation. The manipulations took place on 31 December 2007 and on 31 January 2008, such as the manipulation of a number of different European and North American exchanges.
FSA fines Sun Life of Canada £600k for with-profits failings
Date: 18 Oct
The FSA fined Sun Life Assurance Company of Canada (SLOC) £600,000 for governance failings in its with-profits business. The failings became apparent after two transactions took place one of which affected one of the firm’s with-profits funds, which holds around 114,000 policies and £1.2 billion in assets.
FSA fines Bank of Scotland £4.2 million for record failings
Date: 19 Oct
The FSA fined Bank of Scotland (BOS) £4.2 million for failures in its systems, the result of mortgage information being held unaligned systems, leaving the bank with inaccurate mortgage records for 250,000 customers. BOS mistakenly made goodwill payments of £20.4 million to 22,700 out of 33,700 customers.
Ashcourt Rowan hit with £412k legacy fine
Date: 13 Nov
Some 23% of Ashcourt Rowan portfolios showed ‘high risk of unsuitability’; it had settled a £412,000 fine with FSA to resolve outstanding issues. The city watchdog said there was high risk that investment managers were making decisions that did not match their client’s expectations.
FSA fines credit card insurer £10.5m over widespread mis-selling
Date: 15 Nov
The FSA issued £10.5 million fine over real activities, to credit card insurer Card Protection Plan (CPP) for mis-selling insurance products. CPP faced a total bill of £33.4 million, including the agreed £14.5 million to pay redress to consumers. CPP said its card protection product would provide customers with up to £100,000, of insurance cover, when it was already covered by their banks. CPP sold the products through its own sales channels and high street banks, generating an income of £646.5 million.
UBS hit with stinging £29.7 million fine after Adoboli losses
Date: 26 Nov
The FSA hit UBS with a £29.7 million fine for allowing Kweku Adoboli to cause 'substantial losses' totaling US$2.3 billion. The City watchdog said systems and controls failings at UBS revealed serious weaknesses in its procedures, management systems and internal controls.
UBS fined $1.5bn for Libor rigging
Date: 19 Dec
UBS is fined $1.5bn (£940 million) by US, UK and Swiss regulators over its role in the Libor fixing scandal. Including a record £160 million penalty from the UK's Financial Services Authority (FSA). The Swiss bank is the second major institution to be penalised over attempts to manipulate Libor, after Barclays was handed a £290 million fine by US and UK regulators earlier this year. The scandal also resulted in the loss of its then chief executive Bob Diamond.
FSA fines Gracechurch boss after clients lose £2m on small-caps
Date: 20 December
The Financial Services Authority (FSA) has handed a £450,000 fine to the chief of Gracechurch Investments after it pressured clients in to investing in small cap stocks. Clients made losses of at least £2 million and the FSA said the fine would have been as much as £1.5 million if Gracechurch had not already been in liquidation.