FSA Calendar Year-End Update 2012

02 January 2013
By Robert Patton et al.

Five of the 10 largest Financial Services Authority (FSA) fines of all time have been levied since 1 January 2012, according to NERA's new report, FSA Calendar Year-End Update 2012. The report analyzes trends based on NERA's proprietary database of fines and other enforcement activity by the FSA. Among the report's findings are that fines imposed by the FSA since 1 January 2012 (through 20 December) have totaled £310 million, more than four times the total for 2011. This increase is due to a handful of very large fines, including the £160 million fine against UBS for LIBOR manipulation announced 19 December, which is the largest-ever FSA fine by a substantial margin. The number of fines assessed against firms, 25, was in line with last year. In contrast, the number of fines against individuals fell to its lowest level since 2009, and the aggregate fine amount imposed on individuals fell slightly compared to 2011.

According to the report, the dramatic increase in aggregate fines is the result of a few headline-grabbing penalties against banks, notably those against UBS and Barclays for manipulation of LIBOR and EURIBOR, and against UBS for failing to prevent unauthorized trading by a rogue trader, Kweku Adoboli. Those three fines alone totaled nearly £250 million. The NERA report also finds that, with £284 million in fines already imposed through the first three-quarters of the FSA's fiscal year (ending 31 March 2013), fines against firms have already exceeded the combined total from all previous fines against firms in the FSA's history.