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A Million Here, A Million There, Soon It Adds Up To Real Money
The Stock Market is in freefall, productivity is neck and neck with it in the race to hit rock bottom, but there is one sector of the finance market that is booming.
For a safe job with long term job security and the prospect of rich pickings, get yourself a berth with one of the finance watch dogs. The regulatory bodies of the world are having a field day.
Britain's own Financial Services Authority has had a particularly good start to the century. In 2002 it pulled in 7.4 million GBP in fines; in 2003 it upped that to 10.9m GBP, more than doubling that to 24.7 million GBP in 2004. In 2005 it took 16.9 million GBP before a lean patch in 2007 when it could only squeeze 5.3 million GBP.
But last year's figure was 22.6m GBP, and 2009 has started well for the regulators. Lloyds TSB has just agreed to pay the US authorities 350 million USD for money transfers that violated US sanctions.
The sanctions busting involved removing information including names and addresses so clients in Iran, Libya and Sudan could carry out business in America. The 350 million USD is being split between the US government and New York County. What other kind of business is making these sort of figures today?
In August last year the FSA hit Credit Suisse, the Swiss bank, with a 5.6 million GBP fine for failing to monitor its traders closely enough _ and then the New York Stock Exchange took another 187,000 GBP off it for using its knowledge of customers' orders to make a profit.
One very profitable field for the watch dogs has been anti- money laundering legislation. In January 2007 America's National Association of Security Dealers (NASD) fined the Bank of America 3 million USD for failure to obtain customer information on certain high risk accounts.
As far back as 2002 the FSA checked out the Bank of Scotland's records - and fined it 1.25 million GBP for failing to keep proper records. The Royal Bank of Scotland was fined 750,000 GBP for similar offences. In 2003 it was the turn of Northern Bank, a Belfast-based business owned by National Australia Bank, to be fined 1.25 million GBP for lax money laundering checks.
IT problems have also swelled their coffers. In February 2006 America's Securities and Exchange Commission (SEC) fined Morgan Stanley 15 million USD for failing to keep email records demanded by a client wanting to sue the bank for giving misleading advice.
The client, billionaire Ronald Perelman went on to take the bank for 1.5 billion USD for failing to uncover fraud in appliances company Sunbeam. The same year the FSA fined Deutsche Bank more than 6.3 million GBP for failing to follow correct procedures in the purchase of shares in the truck company Scania.
Last year the FSA went to work on banks and businesses mis-selling payment protection insurance, (PPI) designed to cover repayments on loans, mortgages and credit cards. The HFC Bank, part of HSBC, was fined more than 1 million GBP.
The regulator said HFC had failed to ensure customers received suitable advice between January 2005 and May 2007. It had already fined five smaller firms between 56,000 and 610,000 GBP for poor selling practices: Regency Mortgage Corporation Ltd, Lions, Redcats (Brands) Ltd, GE Capital Bank, and Capital One Bank (Europe) plc.
Three other cases involving PPIs included Capital Mortgage Connections Ltd (17,500 GBP); Home and County Mortgages Ltd (52,500 GBP) and Hadenglen Home Finance plc ( 133,000 GBP, and 49,000 GBP for its chief executive). Ask any stockbroker when was they last time they collected such a fat purse of commissions.
This year began in fine form for the FSA: on January 8 it fined Aon Ltd 5.25 million GBP for failing to take reasonable care to establish and maintain effective systems and controls to counter the risks of bribery and corruption associated with making payments to overseas firms and individuals.
At home, and abroad, it's the regulators who are keeping the cash tills jingling.
About the Author Samantha is an expert Research and Theatre consultant. She is currently writing for Show and Stay and is very excited about the upcoming West End revival of Oliver!
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