United Kingdom

Topic: Investigations and enforcement

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FCA publishes Decision Notices concerning the market disclosure and related conduct of a premium listed issuer, its CEO and Finance Director

The FCA has decided to fine a premium listed issuer, Cathay International Holdings Limited (Cathay) £411,000 for a number of breaches of the Listing Principles and the Disclosure and Transparency Rules.  In addition, the FCA has decided to fine Cathay’s CEO £214,300 for being knowingly concerned in those breaches and its Finance Director £40,200 for … Continue Reading

Hope for investors in London Capital & Finance as FSCS continues to explore whether there are grounds for compensation

London Capital & Finance (LC&F), which collapsed in January 2019, was authorised by the FCA in relation to its promotional activities. However, the actual sale of mini-bonds by LC&F was not a regulated activity and so not typically protected by the Financial Services Compensation Scheme (FSCS), which has called into question the scope of protection … Continue Reading

London Stock Exchange announces public censure and £300,000 fine for a PLC for AIM Rule breaches

On 30 May 2019, the London Stock Exchange (the Exchange) announced a public censure and £300,000 fine for a PLC in relation to breaches of a number of AIM Rules for Companies (AIM Rules) arising from a variety of failings including misleading announcements, non-disclosure of related party transactions and inadequate board level challenge.  The fine … Continue Reading

UK Supreme Court grants KBR Inc. leave to appeal against controversial decision on extraterritorial effect of Section 2 Notices

On 8 April 2019, the UK Supreme Court granted KBR Inc. leave to appeal against a decision that allows the SFO to compel certain foreign companies to hand over documents held overseas. The Supreme Court’s decision was published on 23 May 2019 (see here). KBR Inc. is appealing the judgment in R (on the application … Continue Reading

FCA publishes Notice of Undertaking by debt management firm in relation to unfair cancellation terms in standard form contracts

On 23 May 2019, the FCA published a Notice of Undertaking against the debt management firm, stating that it was concerned that: two of the terms in the firm’s standard form contracts had the potential to give the firm discretion to charge consumers unspecified amounts should a consumer cancel the contract, which could lead to … Continue Reading

FCA rejects Complaints Commissioner’s recommendation for ex gratia payment in respect of loss related to defective Financial Services Register

The complainant suffered loss after she invested in a firm which was later identified as a clone.  Before investing, the complainant had contacted the FCA to ask whether the firm (also regulated in Austria) was a regulated entity. The FCA confirmed that the firm was legitimate based on its registration number. The FCA also recommended … Continue Reading

FCA publishes undertaking by firm in relation to unfair termination clause in standard client terms

On 9 May 2019, the FCA published an undertaking given by an investment management firm in relation to a term in its standard client contracts which allowed the firm to terminate the contract without the requirement to provide prior written notice. The FCA considered that the term was likely to be considered unfair under the … Continue Reading

London Metal Exchange launches consultation on new responsible sourcing standards for all traded metals

On 23 April, the London Metal Exchange (LME) launched a formal market-wide consultation on the introduction of responsible sourcing standards for all traded metals. Under the new rules, all LME listed brands will be required to undertake a phased approach, starting with a Red Flag Assessment based on the OECD Guidelines for Multinational Enterprises by … Continue Reading

A Framework for OFAC Compliance Commitments

Yesterday, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) published ‘A Framework for OFAC Compliance Commitments’* in order to provide organizations subject to US jurisdiction, as well as foreign entities that conduct business in or with the United States or US persons, or that use US-origin goods or services, with a … Continue Reading

EU Parliament approves new EU-wide rules to protect whistleblowers

On 17 April, the European Parliament adopted new rules to protect whistleblowers. The rules are designed to encourage the reporting of breaches of EU law by offering to whistleblowers EU-wide protection from dismissal, demotion and other forms of retaliation in areas including public procurement, financial services, money laundering, product and transport safety, nuclear safety, public … Continue Reading

Mark Steward indicates it may be time for criminal prosecutions under the Money Laundering Regulations

In a recent speech, FCA Director of Enforcement and Market Oversight Mark Steward again made clear that the FCA is prepared to use its power to bring criminal proceedings for breaches of anti-money laundering (AML) obligations set out under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs … Continue Reading

UK Supreme Court clarifies issues on parent company liability in Lungowe v Vedanta

Summary This landmark judgment from the UK Supreme Court means that the claim brought by 1,826 Zambian villagers against UK-based Vedanta and its Zambian subsidiary KCM can proceed to a trial of the substantive issues in the English courts. One of the issues that now falls to be examined is the controversial question of whether … Continue Reading

Global Regulatory Enforcement and Sanctions Trends for 2019

In this on-demand webinar, members of our Regulatory, Compliance and Investigations team in London, France, the US and Hong Kong give their thoughts on likely regulatory enforcement and sanctions trends for the rest of this year based on recent enforcement cases and forward looking statements from the regulators. Topics discussed include individual accountability, anti-money laundering … Continue Reading

SFO to hit back on privilege in new cooperation guidance

In a speech earlier this week  Lisa Osofsky announced that the SFO will shortly publish guidance on its expectations in relation to self-reporting and cooperation. The speech suggested that waiver of privilege over internal investigations material will be seen by the SFO as a strong indicator of, if not a precondition to, cooperation for the purposes … Continue Reading

The FCA has announced that there will be an independent investigation into the failure of London Capital & Finance

On 1 April 2019, the FCA announced that there will be an independent investigation into the failure of London Capital & Finance (LC&F). The FCA stated that the investigation should cover: whether the existing regulatory system adequately protects retail purchasers of mini-bonds from unacceptable levels of harm; and the FCA’s supervision of LC&F. LC&F was … Continue Reading

Review of the UK Bribery Act 2010 – House of Lords Committee publishes Post-Legislative Scrutiny Report

Earlier this month, the House of Lords Select Committee (the Committee) on the Bribery Act 2010 published its Post-Legislative Scrutiny Report. The Report provides a useful summary of prosecutions under the Bribery Act and the debate surrounding “adequate” and “reasonable” procedures,  and offers insight into the limited extent to which Suspicious Activity Reports (SARs) lead … Continue Reading

EU Parliament Working Group presents its Shadow EU Action Plan on the Implementation of the UN Guiding Principles on Business and Human Rights within the EU

On 19 March 2019, the European Parliament Working Group on Responsible Business Conduct (RBC Group) announced the contents of its Shadow EU Action Plan on Responsible Business Conduct (the Plan). The Plan sets out the RBC Group’s priorities to ensure the promotion and protection of human rights in the EU business sector over the next … Continue Reading

UK Export Finance adopts OECD recommendation on tackling bribery in international business transactions

On 14 March, the UK Export Finance (UKEF) announced the adoption of the revised OECD Council recommendation on Bribery and Officially Supported Export Credits (the Recommendation), to prevent bribery in international business transactions. The Recommendation, while not legally binding, strengthens anti-bribery and corruption policies and procedures across adherent Export Credit Agencies (ECAs). Current adherents to … Continue Reading

FCA fines multinational firm £27.6 million for transaction reporting failures

The Financial Conduct Authority (FCA) has fined a multinational investment bank and financial services company (the Firm) £27,599,400 for failing to ensure it provided complete and accurate information to approximately 86 million reportable transactions and erroneously reporting 49 million transactions to the FCA. The Final Notice states that over a period of more than nine years, … Continue Reading

Financial Reporting Council to be replaced by new regulator with enhanced powers

On 11 March 2019, the Business Secretary, Greg Clark, announced that the Financial Reporting Council (“FRC”), a UK regulator responsible for auditors, accountants and actuaries, will be abolished. The FRC will be replaced by a new regulator, the Audit, Reporting and Governance Authority. The decision follows an independent review of the FRC completed in December … Continue Reading

Financial Ombudsman Service – increased award limits

On 8 March 2019, the FCA confirmed that from 1 April 2019 the Financial Ombudsman Service’s (FOS) current £150,000 award limit will change to: £350,000 for complaints about actions or omissions by firms on or after 1 April 2019; and £160,000 for complaints about acts of omissions by firms before 1 April 2019, and which … Continue Reading

The FCA fines an individual for failing to observe proper standards of market conduct and on similar facts issues its first formal decision under its competition powers against three asset management firms

On 21 February 2019, the FCA fined two asset management firms for breach of competition law.  No fine was imposed on the other asset management firm, Newton Investment Management Limited (Newton), as it had been given immunity under the competition leniency programme.  This decision followed the FCA’s announcement on 4 February 2019 that it had … Continue Reading
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