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FSA cracks down with huge fines

Published on 1 Mar 2010 under category: legal

Firms will face much tougher penalties for customer related practices and market misconduct, under the watchdog's new penalties framework.

The Financial Services Authority (FSA) has said that firms accused of contravening standards of customer relations and engaging in market misconduct could be fined 20 per cent of their income from the breach.

In addition, individuals found responsible for the misconduct could have up to 40 per cent of their salary and benefits taken into account for fines.

All fining practices are calculated on factors including the profits made from misconduct, the gravity of the rule-breaking and how effective the fine is, as a deterrent.

On the revised framework, Margaret Cole, director of enforcement and financial crime at the watchdog, said: "Despite industry opposition we have decided to implement these proposals as we believe enforcement penalties are a powerful tool to help change behaviour in the industry.

"We imposed record fines in 2009, but this new approach further amplifies the deterrent effect of our penalties and sends a powerful message to firms that makes it clear that non-compliant behaviour will not be tolerated."

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