Financial fraud highest in mortgage industry
Ernst & Young’s analysis found that total fines have exceeded £1bn in the past five years with a whopping 55% coming from the financial services industry.
John Smart, partner at Ernst & Young said: “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.
“Just under half of the penalties handed out in the past five years have been monetary fines and the market, for the most part, is not in a condition for businesses to be losing money due to negligence.
“These results should serve as a stark warning to all businesses in the UK to get their houses in order.”
The study’s findings also revealed that individual prison sentences across all regulatory prosecutions ranged from eight months to ten years, with partners and directors receiving the heaviest punishments.
The research reveals that since 1997, the average prison stay of a convicted fraudster is 2,000 days.
Smart added: “The extent and variation in the level of fines and prison sentences sends a clear message to UK businesses and their employees that misconduct will not be ignored.
“Board members will need to take a good look at what they are doing and undertake a full risk and systems review in order to identify any blind spots and identify who the fraudsters are.
“Firms that fail to take appropriate action in this area not only risk fines and sentencing, but may also cause irreparable damage to their brand.”