Home Estate Planning UK agencies failing to punish top execs for corporate misconduct, report warns

UK agencies failing to punish top execs for corporate misconduct, report warns

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UK regulators and prosecutors are failing to properly hold senior executives to account for acts of corporate misconduct, a new report has warned. 

Where corporate fines are imposed, whether through prosecution, settlement or regulatory action. it is “extremely rare to have any corresponding individual enforcement action”, a report by campaign group Spotlight on Corruption has concluded. 

The report emphasised that directors from small and medium-sized enterprises (SMEs) are far more likely to face conviction, regulatory fines and bans than senior executives in large firms. 

The Financial Conduct Authority (FCA) issued a total of £4.1bn in fines against 139 firms between 2013 and 2022, but only 30 individuals were fined in these cases, of which only eight were top executives formerly employed by large firms, the report found. 

While it has the power to disqualify directors, no individuals were convicted as a result of these corporate fines, the group said. 

Meanwhile, the Serious Fraud Office (SFO) has secured a total of £2.1bn from both company convictions and plea deals, known as deferred prosecution agreements, involving 20 firms. However, only 18 individuals were convicted in those cases, of which only one was considered a senior executive at a large firm, according to the group’s analysis.

The group called for the government to undertake a full review of the legislative and enforcement barriers
that may prevent holding senior executives to account.

Dr Susan Hawley, executive director of Spotlight on Corruption, said: “After every corporate scandal, from the financial crash to the Post Office, there are rightly calls for senior executives to face accountability – but this rarely happens. Whether it’s Airbus’ global bribery scheme, or Natwest’s money laundering, senior executives keep evading any responsibility. This lack of accountability is bad for British business, bad for the UK economy and bad for the British people.”

A spokesperson for the SFO said: “In the last year alone, we secured significant convictions for six executives, we are currently prosecuting another 14, and are hitting fraudsters in their pockets with record fines and confiscations.

“Late last year, Parliament further strengthened our ability to fight fraud with new powers, which will boost our investigations and prosecutions”.

The FCA declined to comment.

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