The U.K. financial services industry was fined more than 550 million pounds ($831 million) by regulators for fraudulent activity since 2007.
Total fraud fines in all industries during the period exceeded 1 billion pounds, with banks, lenders and other financial firms accounting for 68 percent of the penalties, Ernst & Young LLP said in a report today. Consumer companies that produce food, beverages, tobacco and household goods, had the second largest total of fines during the period, the accounting firm said.
Britain’s biggest banks have been caught up in several regulatory probes. Banks including Lloyds Banking Group Plc, Royal Bank of Scotland Group Plc and Barclays Plc have set aside more than 13 billion pounds to compensate customers who were improperly sold payment protection insurance. Barclays, UBS AG and RBS have been fined more than $2.5 billion by U.S. and U.K. regulators for manipulating Libor rates.
“It is worrying to see that the regulators have needed to step in so frequently and issue punishments of this severity to businesses and executives,” John Smart, a partner at Ernst & Young in London, said in the press release. “These results should serve as a stark warning to all businesses in the U.K. to get their houses in order.”
The study examined 721 cases of fraud reported since 2007 by the Financial Services Authority, Serious Fraud Office and the Office of Fair Trading. The average prison sentence for the director of a company that committed fraud was 3 years and 3 months.