Trebles all round for FSA fines?

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The Financial Services Authority wants a consistent and more transparent framework for calculating financial penalties which could mean some fines treble in size.

The regulator says it is to change behaviour and address concerns that firms are repeatedly failing to improve standards (e.g. in relation to mis-selling to consumers and market misconduct).
The FSA also wants to ensure that fines better reflect the scale of the wrongdoing and that any profits made from the breaches are clawed back.
Under the new proposals, fines will be linked more closely to income and be based on up to 20% of the company’s income from the product or business area linked to the breach over the relevant period.
They will also be based on up to 40% of an individual’s salary and benefits (including bonuses) from their job relating to the breach in non-market abuse cases and have a minimum starting point of £100,000 for individuals in market abuse cases.
The total fine imposed will also take into account other factors, such as the desired deterrent effect and any settlement discount.
Margaret Cole, director of enforcement at the FSA, said: “These proposals are an important step in pushing forward our ethos of credible deterrence. By hitting companies and individuals in the pocket where it hurts

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