Regulation

US Regulators Lead Pack In Penalties On Firms And Individuals

In the rundown of how individual countries rank, in terms of regulators levying fines on people and corporations, the United States tops the list.

That’s according to findings from Duff & Phelps, which through its Global Enforcement Review (done through its compliance and regulatory consulting practice), said that total penalties have climbed by 30 percent from 2015 to 2017, to $26.5 billion. The tally of these “large enforcement cases” may be on the decline, though as the findings show that they stand at $8.1 billion through the first six months of 2018, where last year showed $18.4 billion over the corresponding period.

“This decline is particularly evident in the US, UK and Europe,” the company said in a release.

The U.S. accounted for 94 percent of the total amount of penalties handed down on companies ($24.4 billion) and 99 percent of the amount brought against individuals ($621 million). Fines against companies were up 2 percent between 2016 to 2017 and over that same period were up 23 percent against individuals.

The United Kingdom showed total penalties up significantly, reaching €866 million, up from €71 million in 2016, and this was tipped by two larger fines in the last year that came to €673 million. Fines against individuals in the U.K. were off quite a bit, dipping from €1.8 million to less than €1 million in 2017. In Europe beyond the U.K., the penalty amounts had been “skewed” by three cases that totaled 485 million euros, but dropped to 109 million euros in 2017.

“Activity in Europe was bolstered by more active enforcement by regulators such as the European Commission, Central Bank of Ireland and France’s Autorité des Marchés Financiers. Penalty amounts against individuals in Europe, whilst still modest, grew from 1.6 million euros in 2016 to  2.9 million euros in 2017,” said Duff & Phelps.

Said Nick Bayley, managing director of regulatory and compliance consulting at Duff & Phelps in the statement: “Massive fines on firms have lost their power to shock, not just in the industry but also among the public.

“The declining penalty amounts from previous years in the UK point to the end of the big benchmark manipulation cases but also potentially suggests a change in regulators’ enforcement approach and their faith in the ability of big fines alone to change culture. Regulators globally are also using a wider range of enforcement tools in an attempt to improve conduct,” he said.  As one example, he pointed to the Senior Managers & Certification Regime in the U.K.

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