Reports of suspicious transactions up 28% under new regulator

02 Sep 2014 | 11:52 am | 1 min. read

The number of suspicious transactions reported to the financial services watchdog has shot up by 28% since the FCA took over as City regulator, according to international law firm Pinsent Masons

Data obtained from the Financial Conduct Authority by Pinsent Masons shows that the number of suspicious transaction reports – often associated with suspected insider dealing – has increased from 1099 in 2012/13 to 1409 in 2013/14. 

The figures also show that there has been a 316% rise in suspicious transactions in the past five years rising from 338 in 2008/9 to 1409 in 2013/14. On average 117 suspicious transactions are now reported per month compared to 28 per month five years ago.

Reports of 'Misuse of information', the most frequently reported abuse, rose 29% under FCA supervision, from 980 reports in 2012/13 to 1267 reports in 2013/14. Reports of 'distortion and manipulation' saw a 24% increase in the same time period. 

A suspicious transaction is one in which there are reasonable grounds to suspect it might constitute market abuse, such as insider dealing or market manipulation. It has been a requirement of the Market Abuse Directive (MAD) since 2005 that firms seeing suspicious transactions must report these to the FSA/FCA so that it can review these and other similar transactions for evidence of market abuse.

Michael Ruck, a senior financial services enforcement lawyer at Pinsent Masons and formerly with the Financial Conduct Authority commented: 

“The FCA and previously the FSA definitely upped its game regarding the profile of its insider dealing and market abuse enforcement action.  The fear factor from this action and the current high profile markets investigations may be one reason to explain the rapid rise in suspicious transaction reports over the last few years.

“It may be suggested that as the markets have recovered over the past few years that there has been an increase in misconduct leading to the rise in reporting, however, firms and individuals are now far more cautious and making a suspicious transaction report affords them some peace of mind that the regulator won’t be knocking down their door early one morning following a tip-off from another source.

“The fear of non-compliance and even higher penalties now outweighs the fear of a regulator asking questions and potential enforcement action. 

“Firms need to be fully up to speed on their reporting requirements and the current approach of the regulator.” 

The FCA has vowed to continue to focus on potential financial crime risks, in line with their objectives to protect and enhance the integrity of the UK financial system and will take intensive and intrusive action where serious issues are identified.

 

Suspicious Transaction Reports (by authorised firms)

 

Apr 08- Mar 09

Apr 09 – Mar 10

Apr 10- Mar 11

Apr 11- Mar 12

Apr 12-Mar 13

Apr 13- Mar 14

 

Distortion/ manipulation

56

66

59

71

97

120

 
 

False/ misleading

10

5

11

18

18

12

 

Misuse of information

272

323

530

521

980

1267

 

Other

0

0

0

0

4

10

 

Total

338

394

600

610

1099

1409

 

 

 

Latest press releases

Show me all press releases

Pinsent Masons helps secure planning consent for new landmark Holocaust Memorial

Multinational law firm Pinsent Masons has advised the Ministry of Housing, Communities and Local Government as applicant in securing planning permission for a new national Holocaust Memorial and Learning Centre to be located in central London.

Pinsent Masons launches online tool to spot future home-working related litigation for financial services firms

Multinational law firm Pinsent Masons has launched a new working-from home audit tool to help financial services organisations understand the hidden litigation and regulatory risks associated with staff increasingly working from home on a more permanent basis.

Pinsent Masons advises Seraphine Group PLC on its £150m main market IPO

Multinational law firm Pinsent Masons is advising Seraphine Group plc, an international digitally-led maternity and nursing wear, on its IPO and premium listing on the main market of the London Stock Exchange.

People who viewed this press release also viewed

Show me all press releases

Pinsent Masons launches online tool to spot future home-working related litigation for financial services firms

Multinational law firm Pinsent Masons has launched a new working-from home audit tool to help financial services organisations understand the hidden litigation and regulatory risks associated with staff increasingly working from home on a more permanent basis.

Pinsent Masons unveils FY21 year end results

Multinational law firm Pinsent Masons has announced its FY21 year end results, reporting against last year’s metrics as the firm advances its strategy to become a purpose-led, professional services business with law at the core.

Pinsent Masons to cut absolute global carbon emissions by at least 50%

Multinational law firm Pinsent Masons has unveiled targets to cut absolute carbon emissions by a minimum of 50% by 2030, as it continues to reduce its environmental impact and support clients in tackling the climate crisis.

For all media enquiries, including arranging an interview with one of our spokespeople, please contact the press office on

+44 (0)20 7418 8199 or 

Location contacts