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Enforcement Watch
Issue 18

Editor's Note

We have seen some noteworthy enforcement cases in recent months. The most interesting of the crop looks like the Upper Tribunal grappling with the Macris test on identification. As to the future, what with Andrew Green's report into FSA enforcement failures following HBOS, and the FCA telling us what it thinks of privilege claims in internal investigations, the enforcement landscape may be changing. And when you put all this in the context of an SMR regime about to go live, we live in interesting times. We hope you find this issue useful.

Enforcement case highlights

5 November 2015: Court rulings stir up the privilege debate - Read more

12 November 2015:  Raphaels Bank fined £1.2m in relation to outsourcing failures - Read more

25 November 2015: Barclays Bank Plc fined £72m for failures to manage financial crime risks - Read more

10 December 2015: Threadneedle fined £6m for front office failings in respect of its fixed income desk - Read more

12 January 2016: Upper Tribunal interprets Macris identification judgment - Read more

On the horizon

SMR: Future implications of the demise of the reversal of the burden of proof - Read more

Internal Investigations: The FCA makes its position clear - Read more

Report into the FSA's Enforcement actions following the failure of HBOS - Read more

Thematic Review on suitability of investment portfolios points to possible action - Read more

Thematic review on flows of confidential and inside information - Read more

Court rulings stir up the privilege debate

In a series of High Court judgments (8 June and 5 November), the interaction between the law of privilege, civil disclosure and FCA investigations has been developed. These will be of significant interest to Firms under investigation and to those looking to negotiate with the FCA or PRA.

Raphaels Bank fined £1.2m in relation to outsourcing failures

R.Raphael & Sons plc has been fined £1.2m by the PRA for failures in relation to outsourcing of various aspects of its finance functions to other companies in the same group.

Barclays Bank Plc fined £72m for failures to manage financial crime risks

Barclays has been fined just over £72m for Principle 2 (due skill, care and diligence) breaches associated with failures to manage the financial crime risks related to a £1.88bn transaction arranged for a number of ultra-high net worth politically exposed persons (PEPS) during 2011 and 2012.

Threadneedle fined £6m for front office failings in respect of its fixed income desk

At the end of last year, Threadneedle Asset Management Limited was fined just over £6m for breaches of Principle 3 (risk management systems and controls) and Principle 11 (relations with regulators). The £6m fine takes into account a 20% Stage 2 settlement discount.

Upper Tribunal interprets Macris identification judgment

In Ashton, the Upper Tribunal has recently interpreted the somewhat problematic identification test laid down by the Court of Appeal in the Macris case.

SMR: Future implications of the demise of the reversal of the burden of proof

Etched into the consciousness of the whole banking community and many others, the SMR proper is coming into force in March 2016.

Internal Investigations: The FCA makes its position clear

It is increasingly common for authorised Firms to conduct internal investigations into possible failings or misconduct. On 5 November 2015, Jamie Symington gave a hard hitting speech about his expectations of Firms' engagement with the FCA in those circumstances.

Report into the FSA's Enforcement actions following the failure of HBOS

On 19 November 2015, the FCA and PRA published Andrew Green QC's Report into the reasonableness of the enforcement decisions taken by the FSA following the failure of HBOS.

Thematic Review on suitability of investment portfolios points to possible action

On 9 December 2015, the FCA published a thematic review concerning suitability of retail investment portfolios provided by wealth management and private banking Firms...

Thematic review on flows of confidential and inside information

On 10 December 2015, the FCA published a thematic review looking at the way in which financial services Firms receive, generate and handle confidential and inside information...