Enforcement reports:
Q3 2024 sees landmark fines, enforcement “firsts” and unprecedented regulatory actions 

Overview Q3 2024

Corlytics’ report for Q3 2024 shows regulators “roaring” into increased action, imposing historic fines and establishing new precedents across different fields 

Regulators ramped up enforcement in Q3 2024, leading to historic actions that underscore the industry’s elevated regulatory risks, global regulatory intelligence company Corlytics announced today. Among the key cases was the Commodity Futures Trading Commission’s (CFTC) $12.7 billion ruling against FTX and Alameda that marked a significant shift toward greater accountability in cryptocurrency markets. 

However, the unprecedented actions were not just limited to the crypto industry alone. The third quarter of 2024 saw regulators take groundbreaking measures across various sectors, reflecting a period of heightened enforcement intensity. According to Corlytics’ latest enforcement data, the total value of fines increased significantly up, with major actions not only targeting high-profile entities but also introducing enforcement “firsts” that set new precedents. 

Recognising the significance of these developments, Susie MacKenzie, Head of Legal and Regulatory Analysis at Corlytics, commented: “We have seen the regulators roar into action in this third quarter, not only in terms of the amount of fines imposed but also with some enforcement firsts. One action stands out for both its magnitude and profile: two years ago, the collapse of FTX sent shock waves through the crypto industry, raising fears of a prolonged ‘crypto winter.’ In August, the CFTC obtained a $12.7 billion judgment against FTX and Alameda. The CFTC identified fundamental failures, stating that ‘the basic regulatory tools, like governance, customer protections, and surveillance that exist to identify misconduct and ultimately prevent collapse, were simply not there.’” 

In the US, recordkeeping failures continue to be a major enforcement focus, particularly with the use of off-channel communications like WhatsApp. Fines have been imposed on credit rating agencies, broker-dealers, investment advisers. The significance of cooperation and self-reporting has been emphasised by the Securities and Exchange Commission (SEC), which has hinted that such behaviour may lead to lighter penalties. Notably, UK regulators have yet to take similar action, but firms are being reminded of their recordkeeping obligations, especially with the rise of homeworking and potential compliance risks linked to mobile apps. 

Consumer protection also remained a key priority in the US, as evidenced by the Consumer Financial Protection Bureau’s (CFPB) $20 million fine against TD Bank, alongside an additional restitution of over $7 million, for providing inaccurate, negative information about its customers to credit reporting agencies. 

In the UK, Q3 witnessed the Financial Conduct Authority (FCA) imposing its first-ever fine on an audit firm, holding PwC accountable for failing to report concerns about possible fraudulent activity at London Capital & Finance. The FCA also penalised Starling Bank nearly £30 million for inadequacies in its financial crime controls, describing the bank’s screening systems as “shockingly lax.” 

Meanwhile, the Australian Securities and Investments Commission (ASIC) intensified its focus on greenwashing, resulting in a £11.3 million penalty against Mercer Superannuation in its first greenwashing case. ASIC’s report into greenwashing interventions for 2023-2024 highlights the growing scrutiny of environmental claims and enforcement priorities for the year ahead. 

“As we continue to monitor regulatory trends, it’s clear that the SEC is intensifying its focus on senior employee conduct. This quarter, they’ve emphasised the importance of self-reporting and cooperation, stating that these actions may lead to significantly reduced penalties. In light of ongoing enforcement, particularly around recordkeeping failures due to off-channel communications, firms must remain vigilant. This changing environment shows how important proactive compliance measures are.” concluded Susie MacKenzie, Corlytics’ Head of Legal.