FCA shuts down half its money-laundering investigations in 2020
The Financial Conduct Authority (FCA) has halted half of its money laundering investigations in 2020.
The data comes from freedom of information request by law firm Eversheds Sutherland. It shows the regulator stopping seven of its 14 investigations into money laundering since January.
Five of the seven related to criminal investigations, with the remaining two mixing both civil and criminal aspects.
Mark Steward, director of enforcement and market oversight at the FCA, said in an April speech that the watchdog had a large number of probes in the works.
Steward added that the FCA’s jurisdiction needed to be “enlivened” to prevent it from becoming a white elephant.
The FCA’s annual report shows it closed 185 cases between 2019 and 2020, with 646 still open. Only 15 of the closed cases resulted in financial penalties.
The amount of time it takes the FCA to conclude a case rose from 17.5 months to 23.9 months. The average cost per case rose to £229,000 from £103,400.
The regulator handed out a record level of fines in 2019, more than six times the amount it charged firms in 2018.
An FCA spokesperson tells FinTech Futures that the watchdog is “committed” to ensuring money laundering regulations are fully adhered to. They add it wouldn’t hesitate to take action when rules are broken.
The FCA’s approach has changed to include breaches that might give rise to either criminal or civil proceedings. Its process is to “make inquiries and assess the full nature of the matter” before deciding on action.
The regulator will only bring prosecutions “in the most egregious cases”.
“Investigations are progressing well and we expect we will be making decisions on some of them by the end of this year,” the spokesperson says.
Claims that the FCA is trying to cover its own back rose last month when it proposed a £10,000 compensation cap.
Antony Townsend, the FCA’s independent claims commissioner, called the cap “an explicit fettering of compensation for direct financial loss”.
Townsend also criticised the timing and lack of a spotlight put on the eight-week consultation, which launched in July.
The commissioner said the FCA’s scheme is not clear enough and that some believe “its not primarily a compensation scheme”.