In brief
- Sixteen years of Enforcement Watch chart the evolution of financial services enforcement from large, deterrent fines towards individual accountability, cultural change and earlier intervention to prevent consumer harm.
- The five-step penalty framework remains central, but its application faces increasing scrutiny. Upper Tribunal decisions, including Arian Financial and Banque Havilland, highlight the need for transparent, properly justified penalty calculations.
- Enforcement publicity remains contentious, with criticism of FCA press releases and a backlash against proposals to name firms under investigation before wrongdoing was established. The FCA ultimately dropped those proposals, retaining its exceptional circumstances test.
- Individual accountability has broadened through the Senior Managers and Certification Regime and increased scrutiny of non-financial misconduct, placing personal behaviour and workplace culture alongside financial and regulatory competence.
- The FCA’s increasingly proactive approach includes greater reliance on early supervisory intervention and wider use of criminal powers. That expanding ambition has brought sustained scrutiny from courts, Parliament and industry over the fairness, transparency and effectiveness of its actions.
Overview
Since its first issue in May 2010, Enforcement Watch has tracked the FSA, and later the FCA and PRA, through a period of unusually rapid regulatory change. Reading the publication's near-continuous run end to end reveals that its subject matter is not simply a sequence of unconnected enforcement cases. Four themes recur and evolve across the full sixteen-year span: the calculation and justification of financial penalties; the regulator's approach to publicising investigations and outcomes, and the criticism this has attracted; the rise of individual accountability as an enforcement tool; and a broader, ongoing redefinition of what enforcement is actually for.
Penalties: from a fixed formula to a contested judgment call
The publication's very first issue reports the introduction of a structured penalty regime, following the FSA's 2010 policy statement establishing what became the five-step framework: removing any financial benefit from misconduct, setting a figure for seriousness, adjusting for aggravating and mitigating factors, applying a deterrence uplift, and finally applying any settlement discount. This framework, later codified in the Decision Procedure and Penalties Manual (DEPP), has remained the basic architecture of FCA and PRA penalty-setting ever since, and its five steps are referenced, tested, and occasionally strained in almost every issue that follows.
The framework was applied for the first time within months of its introduction, in the case of market abuser Samuel Kahn, and Enforcement Watch used the case as a worked example of how each step would operate in practice, including the percentage-of-revenue and percentage-of-salary bases used to size a starting penalty for firms and individuals respectively. That case-by-case scrutiny of penalty mechanics became a recurring feature of the publication: subsequent issues examined how the FCA calculated fines by reference to average daily market capitalisation, how percentage-of-salary starting points interacted with deferred remuneration, and how a multiplier could be applied to a Step 3 figure specifically to achieve "credible deterrence" where the formulaic outcome was considered too low.
What began as an exercise in explaining a new formula gradually became an exercise in testing its limits. By the early 2020s, Upper Tribunal decisions were as likely to concern the penalty calculation as the underlying liability finding. The Arian Financial LLP decision saw the Tribunal reduce an FCA fine by more than 60 per cent, disagreeing with the FCA's approach to disgorgement and its chosen deterrence multiplier. The most recent issues show this trend intensifying rather than resolving: the Banque Havilland decision in early 2026 saw the Upper Tribunal uphold the underlying liability finding while excoriating the FCA's penalty reasoning as arbitrary and inadequately explained, cutting the fine by 60 per cent. Enforcement Watch's own commentary on that decision observed that it "has increased pressure on the FCA to justify its decision making and provide greater transparency on the penalties it imposes" - a sentence that could sit comfortably in almost any issue from the preceding five years.
In the early 2010s, the five-step framework was treated as largely mechanical, a calculation the FSA and FCA applied and explained. By the 2020s, the same framework had become a site of genuine contest, with firms and individuals increasingly willing to challenge not just liability but the arithmetic and reasoning behind a fine, and Tribunals increasingly willing to intervene where the regulator's workings were not shown.
Transparency and publicity: from a new statutory power to a recurring flashpoint
The FCA and FSA's power to publicise enforcement action is almost exactly as old as Enforcement Watch itself. The Financial Services Act 2010 gave the FSA power to publish Decision Notices, and the publication's early issues tracked the exercise of that power with evident interest: the first-ever Decision Notices published under the new regime were reported as "the beginning of the new publication regime", with the direction of travel already identified as pointing toward ever-earlier publication.
That direction of travel was tested almost immediately in the courts. The Swift Trade litigation produced the first judicial interpretation of the publication power, with the High Court and Upper Tribunal confirming the FSA's broad discretion to publish a Decision Notice even while a matter remained under appeal. A similar pattern recurred throughout the publication's history: individuals in the Keydata case failed in an application to prevent publication of Decision Notices against them; the Upper Tribunal in Foley v FCA set out the governing legal framework, establishing a strong presumption in favour of publication that could only be displaced by cogent evidence of disproportionate reputational damage; and the same framework was applied again in Frensham, with the same result.
Alongside the FCA's power to publish formal notices, a second and more pointed strand of criticism developed around the FCA's own press releases and public statements. The Wilkins case saw the FCA issue, and then retract, an inaccurate press release about an Upper Tribunal ruling. The Tribunal's decision in Bayliss & Co v FCA went further, directly criticising an FCA press release issued while a Decision Notice was still under appeal and recommending changes to the FCA's internal press release process. These are not isolated incidents: they establish a pattern in which the FCA's public communications about its own enforcement outcomes have periodically become a distinct point of legal and reputational vulnerability, separate from the underlying merits of the case.
This tension reached its clearest expression in 2024, when the FCA published Consultation Paper CP24/2, proposing a marked departure from its longstanding practice of not routinely announcing investigations. The proposal introduced a new public interest framework for early publication decisions, including the possibility of naming firms under investigation before any wrongdoing had been established. Enforcement Watch reported that the consultation "sparked a notable backlash", including criticism from the House of Lords, from politicians, and from City trade bodies, with the FCA publicly defending the proposal on the basis that earlier naming would serve the public interest and support market confidence. Ultimately the proposal was dropped by the FCA with the FCA reverting back to its exceptional circumstances test.
Individual accountability: from approved persons to non-negotiable culture
If penalties and publicity are largely mechanical themes, concerned with how the regulator exercises its powers, individual accountability is a substantive theme concerned with who those powers are meant to reach. Its trajectory across Enforcement Watch is the clearest and most consequential.
The starting point was dissatisfaction with the old Approved Persons regime. The Parliamentary Commission on Banking Standards, reporting in June 2013 in the aftermath of the LIBOR scandal, delivered what Enforcement Watch described as "scathing criticism" of that regime, finding it failed to perform any of its intended functions to an acceptable standard. The Commission's recommendation for a new Senior Persons Regime, covering a narrower population with clearer allocation of responsibility, became the direct ancestor of the Senior Managers and Certification Regime (SMCR).
Enforcement Watch tracked SMCR's construction in unusual detail: the FCA and PRA's joint consultation on the new framework, the eventual exclusion of standard non-executive directors from the Senior Manager Function population, the addition and refinement of Senior Management Responsibilities including a distinct responsibility for culture, and the design of the "presumption of responsibility", the regime's most contested mechanism, under which a senior manager could be held liable for a firm's regulatory breach unless able to demonstrate reasonable steps had been taken to prevent it. Martin Wheatley's 2015 defence of the incoming regime, insisting it was not merely "public theatre", captured the tension the industry felt at the time between welcoming clearer accountability and fearing a tool for what he himself called "institutional scalp hunting".
SMCR's extension to solo-regulated firms in December 2019, and its unexpected stress-test during the covid-19 pandemic, when temporary rule relaxations allowed unapproved staff to stand in for absent senior managers for extended periods, demonstrated that the accountability framework built in the mid-2010s was durable enough to flex under real operational pressure without being abandoned.
From the early 2020s, individual accountability visibly widened beyond financial and prudential competence to encompass personal conduct. The Frensham case, concerning an adviser's fitness and propriety following a criminal conviction unconnected to his regulated activities, marked the point at which "non-financial misconduct" first appears as a named concept in the publication, already described as "a key focus of the FCA in its culture agenda". Lloyd's of London's landmark fine against Atrium Underwriters for non-financial misconduct, described by Enforcement Watch as reflecting the importance regulators now place on "culture and non-financial misconduct", showed the same logic being applied outside the FCA itself. The Treasury Committee's Sexism in the City inquiry, and the FCA's own follow-up survey on culture and non-financial misconduct, culminated in the explicit statement, reported in Issue 45, that inclusive workplace culture was no longer "nice to have" but a "non-negotiable".
Individual accountability has therefore travelled a considerable distance over the life of the publication: from a narrow question of who at a firm should be personally fined for a prudential or conduct failing, to a much broader question of whether that individual's own personal behaviour, on the trading floor or elsewhere, meets the standard the regulator now expects. The line connecting both ends of that journey is the same: enforcement increasingly locates responsibility in identifiable individuals rather than in the abstraction of the firm.
The changing role of enforcement: from deterrence through fines to a proactive, assertive regulator
Underlying all three of the preceding themes is a more fundamental shift in how the FSA and FCA have conceived of the purpose of enforcement itself. The earliest issues of Enforcement Watch describe an FSA pursuing what it explicitly branded "credible deterrence": large, well-publicised fines intended to change industry behaviour primarily through the fear of a substantial financial penalty. Enforcement in this period was, in essence, retrospective and punitive, responding to misconduct that had typically already caused harm.
The LIBOR scandal, and the institutional reorganisation into the FCA and PRA that coincided with it, introduced a second dimension: enforcement as an instrument of behavioural and cultural change within firms, not merely a punishment for firms that had already failed. This is the period in which culture becomes a named regulatory priority, and in which the SMCR machinery was built with the explicit aim of preventing failures by clarifying accountability in advance, rather than only sanctioning them after the fact.
By the late 2010s, a third dimension had emerged: consumer harm scandals, most visibly the collapse of London Capital & Finance, drove pointed public and political criticism of the FCA's own conduct as a supervisor, not merely as an enforcer. Enforcement Watch reported that the FCA came under "significant criticism" over LCF and other high-profile investment frauds, prompting a shift toward earlier intervention, increased ScamSmart consumer publicity, and closer scrutiny of unauthorised firms and financial promotions before harm could crystallise. Enforcement was, for the first time in the publication's run, framed as needing to be preventative rather than purely responsive. Increasingly the focus of the FCA has moved away from Enforcement and towards early supervisory intervention as a quasi-enforcement tool.
The most recent issues show this evolution converging into an explicitly stated ambition. The FCA's 2023/24 Business Plan is reported as reflecting a clear intention to become "a more assertive and proactive regulator", extending into new territory including cryptoasset regulation, the FCA's first pursuit of a statutory auditor, its first criminal charges against a cryptoasset ATM operator, and continued expansion of its use of criminal, rather than purely civil, powers.
The result, sixteen years on from Enforcement Watch's first issue, is an enforcement regime that looks substantially different in ambition from the one the publication began by describing. It has moved from a single-minded emphasis on large, deterrent fines, through a period of building formal accountability structures aimed at individuals and firm culture, to a more assertive and pre-emptive supervisory posture, all while facing sustained and increasingly sophisticated scrutiny, from courts, Parliament, and the industry itself, of how transparently and fairly that expanded remit is actually being exercised.
Conclusion
Read as a continuous record rather than a series of discrete case reports, Enforcement Watch documents something more significant than a sequence of fines. It documents a regulator that has continually expanded what it considers itself entitled and obliged to do, from punishing proven misconduct after the fact, to shaping individual accountability and firm culture in advance, to intervening earlier to prevent consumer harm altogether. Each expansion of ambition has, in turn, generated a corresponding expansion of scrutiny: on the fairness and transparency of penalty calculations, on the propriety of the regulator's own public statements, and on the adequacy of its own investigative and disclosure practices. The four themes traced in this article are, in that sense, not four separate stories but one story, told from four different angles: a regulator continually renegotiating the terms on which it exercises an ever-widening enforcement remit.