UK financial watchdog fines hit record high

The UK's financial watchdog handed out record fines of 89 million pounds ($137.4 million) this year, in a crackdown on banks, individuals and financial scams as it prepares to be replaced by new authorities. Fines imposed by the Financial Services Authority (FSA) nearly tripled compared with last year's 35 million pounds, it said on Thursday.
The FSA levied some of its biggest ever fines on top banks such as J.P. Morgan and Goldman Sachs. It also banned 60 individuals from working in financial services, slightly more than in 2009, and stepped up efforts to warn people off scams and secure compensation for victims of financial fraud, the FSA data showed.
The increase in enforcement operations comes as the FSA - whose Chief Executive Hector Sants agreed in July to stay on for another three years to oversee its dismantlement - prepares to see its powers split in 2012. The watchdog was abolished by Britain's new coalition government earlier this year, in a bid to shake up regulation in the country after the financial crisis.
A new Consumer Protection and Markets Authority (CPMA) will take on the FSA's powers of enforcement against companies and individuals, carrying on the task of tackling financial crime. Separately, Sants, who steered the FSA through the financial crisis, is set to look after bank regulation under another organisation folded into the Bank of England, the Prudential Regulatory Authority (PRA). Margaret Cole, the FSA's current head of enforcement, is hotly tipped as one of the frontrunners for the top job at the CPMA, although no appointment has yet been made.
Under Cole, the FSA handed down its biggest ever fine of 33 million pounds to J.P. Morgan earlier this year after the bank failed to keep client money in separate accounts. Cole said in a statement that the FSA was "committed to keeping the markets clean and trustworthy", adding it would keep a "sharp focus" on consumer protection.
"So there is still a lot to do and in 2011 we will do more," she said. The FSA said it had written to 95,000 people this year to warn them off so-called boiler room share fraudsters, such as scams involving fake shares. It has also been increasing efforts to clamp down on insider dealing, saying 13 people had been charged and were pending trial, after securing seven criminal convictions over the last two years.