Enforcement investigations are the most serious form of FCA intervention. They can lead to financial penalties, public censure, restrictions on business, prohibition or other action against individuals, and significant reputational and operational disruption. They also require firms and senior managers to make early strategic decisions about scope, evidence, governance, privilege, regulatory engagement, settlement and whether to contest the FCA's case.
Whilst the number of FCA enforcement investigations has reduced in recent years, the FCA has emphasised it plans faster, more focused and more impactful enforcement action. Investigations may arise from supervisory escalation, whistleblowing, litigation and complaints, Skilled Person findings, market intelligence, thematic work, individual conduct issues or alleged failures to remediate.
Once an investigation is opened, the way the firm responds in the early stages can materially affect the direction, duration and outcome of the case.