FINANCIAL REGULATORY INVESTIGATIONS AND DISPUTES
CD: Could you provide an overview of recent regulatory investigations in the financial services (FS) sector? What key trends would you highlight?
Lorimer: In recent months, we have seen the first signs of new investigations being opened in the UK. Most striking is arguably the crackdown on so-called ‘finfluencers’ – social media influencers who are alleged to use their platforms to promote financial products and services in breach of Financial Conduct Authority (FCA) rules. The FCA has opened criminal investigations into at least 20 of these individuals, as well as issuing a series of alerts. This follows the FCA’s decision to bring charges against a number of former ‘Love Island’ contestants in May 2024 for promoting an unauthorised foreign exchange scheme on social media.
Frank: Recently, regulatory activity in the financial services (FS) sector has looked to areas like financial crime and anti-money laundering (AML), as well as technology-centric issues such as cyber security and digital assets. Regulators are applying increasing scrutiny on AML compliance, imposing substantial penalties for failures in identifying and reporting suspicious transactions. Financial institutions (FIs) are being held to higher standards, requiring robust risk assessment and monitoring systems to prevent financial crime. Additionally, FS organisations face increasing pressure to protect sensitive customer data, with data breaches leading to significant regulatory action and reputational risks, as well as costly data loss. Emerging areas such as digital assets and cryptocurrencies have seen a renewed focus, with regulators seeking to balance both clear guidelines and healthy innovation.
Jan-Mar 2025 issue
Kingsley Napley LLP
Squire Patton Boggs (UK) LLP
StoneTurn