Fines for City rule breakers halved to speed up inquiries
THE Bank of England is to give City rule breakers half-price fines if they settle cases early in an attempt to speed up investigations.
As part of an overhaul of its enforcement powers for non-criminal cases, the Bank’s Prudential Regulation Authority (PRA) has outlined plans for an “early account scheme”.
The regulator said it wants to “incentivise early admissions” by increasing the discounts that companies and individuals can receive by up to 50pc if they do not contest findings against them.
The PRA has come under fire for its prolonged investigations, including taking years to censure steel magnate Sanjeev Gupta’s Wyelands Bank, with the company avoiding an £8.5m fine as it is being wound down.
Sam Woods, chief executive of the PRA, said: “The changes we are consulting on include the creation of options for quicker investigatory outcomes, by providing a new route for early co-operation and increased incentives for earlier admissions by subjects.”
Since the PRA was established in 2013, the watchdog has concluded 25 successful enforcement actions, including fining then-barclays chief executive Jes Staley in 2018 for trying to unmask a whistleblower.
However, Robert Dedman, a partner at City law firm CMS and former head of enforcement at the PRA, warned that the proposed scheme could have adverse consequences.
He said: “The problem is that they will need to move quickly to qualify without necessarily knowing the full extent of the failing alleged.
“The scheme also increases risks for senior managers who have been suspended or dismissed by their firms, as they may find themselves effectively unable to access the information they need to qualify for the discount,”
The PRA’S consultation on its enforcement reforms is set to run until early August.