Today Corlytics announced the release of its Q2 Global Regulations Enforcement Data report, revealing financial crime, data protection and governance penalties. Corlytics data shows an eye-watering $1.54bn regulatory fines so far this year, and $47.04 billion USD since 2020.
Key Highlights:
- Cumulative Enforcement Total: From Q1 2020 to Q2 2024, fines amassed to $47.04 billion USD.
- Impacted Sectors: Asset Management, Equity Derivatives, Mortgage Lending, and Payment Service Providers are among the top 10 affected business lines.
- Risk Categories: Corporate Governance led the risk categories with $100 million USD in fines for Q2 2024.
Susie Mackenzie, head of Corlytics’ Legal and Regulatory analysis, commented on the Q2 findings, "The second quarter of 2024 has been a quiet one, both in terms of amounts and number of fines imposed. However, we have seen regulators on both sides of the Atlantic focus on unfair customer treatment, with three of the top ten fines relating to this issue. The CFPB fined Sutherland Group for sending borrowers “due and payable” letters that often falsely conveyed that loans were in default and other customer communication failures. It also took action against Chime Financial for failing to refund consumers in a timely manner. In the UK, the FCA fined HSBC for its failures in its treatment of customers who were in arrears or experiencing financial difficulty. Governance issues in sales and trading activities have also been the subject of regulatory action, with Citigroup Global Markets facing three fines from each of the FCA, PRA and BaFin for failings in its trading systems and controls.
Of particular interest in the UK over the past quarter has been the FCA’s decision following an investigation into Link Fund Solutions, the authorized corporate director of the Woodford Equity Income Fund (WEIF), which was suspended in June 2019 after experiencing severe liquidity issues. The fund’s value plummeted, causing significant losses for its investors. The FCA found that WEIF’s liquidity profile had been unreasonable and inappropriate and that Link had failed to supervise the investment manager of the WEIF. The FCA concluded that Link had breached Principles 2 and 6 and that a £50million fine would be appropriate. However, this was not imposed as it would have reduced the amounts payable back to customers under the separate scheme of arrangement."
