SUMMARY

Q2 2024 Enforcement Data

Susie Mackenzie, Head of Legal and Regulatory Analysis at Corlytics, commenting: “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 authorised 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 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.”

SIGNIFICANT ACTIONS

• CFPB fined Sutherland Group for misleading communication.
• Chime Financial penalised for delayed refunds
• FCA fined HSBC for mistreating customers in financial difficulty

REGULATORY FOCUS
Main issues included Consumer Treatment, Conduct of Business Obligations and Market Conduct, with additional attention to Privacy & Cybersecurity, Financial Crime, and Prudential Obligations.

Corlytics’ forensic analysis of regulatory data is provided by our team of  experts to meet today’s requirement to track regulatory activity across the globe.

We provide quarterly updates of global enforcement analytics and this data is charted by amount, by year, by jurisdiction, by regulatory category, by  control failings.

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