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Financial Conduct Authority (FCA) Investigations

Financial Conduct Authority Investigations

The Financial Conduct Authority (FCA) is the UK’s financial services watchdog. The FCA has the power to launch criminal investigations and seek account freezing and forfeiture orders. It often favours a ‘dual track’ approach combining both regulatory and criminal investigations.

The FCA can investigate organisations and individuals within those organisations. An organisation does not have to be authorised by the FCA to face investigation. The FCA may investigate allegations of money laundering, market abuse, insider dealing, misleading statements and practices offences, the restriction on financial promotion, the prohibition on promoting collective investment schemes as well as regulatory breaches by organisations and individuals.

Financial Conduct Authority Notice of Investigation

An FCA investigation will usually commence with a Notice of Investigation being sent to relevant parties. It is crucial that legal representation is sought at this early stage, especially if an interview is to take place. At the conclusion of the investigation, the FCA will present findings and the case may be resolved depending on whether findings are accepted. If the findings are not accepted a response can be provided.

The use of Statutory Powers by the Financial Conduct Authority

The FCA will generally use statutory powers to require the production of documentation, information or the answering of questions.

Criminal Investigations by the Financial Conduct Authority

In criminal investigations and those alleging market abuse an interview under caution may take place. The caution means that an individual does not have to answer questions but an inference may be drawn should that individual fail to mention something that they later rely on in court proceedings. On rare occasions, the FCA may make a request for the police to arrest an individual (note; FCA investigators do not have powers of arrest)

Financial Conduct Authority Regulatory Decisions Committee

It is open to a party under investigation to contest the matter before the Regulatory Decisions Committee (RDC). There will be an opportunity for oral submissions to be made before the RDC.

Early Resolution of FCA Investigations

It may be possible for a case to be resolved without the full FCA investigation process taking place. This is known as an ‘Early Resolution’ case. Anyone under investigation who seeks an early resolution should seek legal advice as soon as possible.

Potential outcomes of Financial Conduct Authority Investigations

Outcomes of investigations can include; withdrawal of authorisation, individual prohibitions, suspensions in respect of firms or individuals, public censure of firms and individuals, financial penalties, injunctions, freezing and seizure of assets and  prosecution.

Olliers advise individuals and organisations facing investigation by the police, the Serious Fraud Office, HMRC, and those facing regulatory prosecutions and breaches.

If you or your organisation is under investigation please contact our team as soon as possible.

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