The Financial Conduct Authority has handed out four fines so far this year in a sharp drop in enforcement action, as it maintains enforcement had "continued as normal" during the pandemic.
According to a Freedom of Information request submitted by law firm RPC, fines imposed by the financial regulator dropped by 76 per cent between January and October when compared with last year when it issued 17 fines in the same period.
The law firm suggested disruption caused by the global coronavirus pandemic may have hampered the City watchdog's ability to impose fines, in particular with social distancing requirements hindering face-to-face interviews during lockdown.
RPC also pointed to a gap between the former head of the FCA Andrew Bailey's departure in March and the recent appointment of Nikhil Rathi as chief executive at the regulator as potential cause for a slowdown in enforcement action - although an interim chief executive was active throughout this period.
But an FCA spokesperson told FTAdviser enforcement at the regulator had "continued as normal" during the pandemic.
They said: "The FCA will open cases where it suspects serious misconduct, with the number of new cases fluctuating month on month and year on year. Nothing much should be read in to the figures."
Yesterday (October 11) FTAdviser's sister publication The Financial Times reported the FCA had taken "significantly less action" over financial misconduct during the pandemic.
The FT pointed to separate figures which showed enforcement cases against companies and individuals had fallen by 76 per cent in the period around the national lockdown.
But the FCA told the FT fewer enforcement cases did not mean it was overlooking wrongdoing.
Earlier this year the City watchdog said it had a "large number" of investigations in its pipeline, some of which were entering "important phases" and tackling "very serious" issues.
With lockdown restrictions beginning to ease law firm RPC said the number of fines issued by the FCA was expected to pick up pace.
But Jonathan Cary, partner at RPC, said this "apparent in enforcement action" was unlikely to last much longer.
Mr Cary said: "While the FCA has issued relatively few fines in the last few months, it will want to make up for time lost during lockdown when it will, understandably, have experienced disruption and delay in a number of investigations.
"The FCA will be looking closely at how businesses have behaved during lockdown, whether they have exercised the necessary understanding and forbearance towards their customers, many of whom will have been placed in extremely difficult financial circumstances because of Covid-19."
rachel.mortimer@ft.com
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