Some people trace some of the issues with enforcement to the arrival of Mark Steward, from the Hong Kong regulator, as the new head of enforcement in 2015 — one of the last appointments by former chief executive Martin Wheatley. Steward left last year.
Lipworth, who is also a former a chief criminal counsel at the regulator, says: "I think Mark Steward wanted to cover a bigger field because he felt there was a lot of misconduct and perhaps the FCA was the only regulator going to tackle it, which is a laudable aim but it's actually impossible because the FCA has finite resources."
Lipworth adds: "There was a view, as a result of various reports, that the FCA shouldn't pick and choose outcomes. When they published the approach to enforcement action it says they will just look at harm, and that's across the board.
"But because the FCA has finite resources in an enforcement function and because you have different levels of experience within the team, including a fair amount of junior people, you just can't do everything."
Picking your targets
Not everyone agrees this was directly attributable to Steward, and Covid may not have helped. But there is more consensus that there is a problem.
Samuel says: "The FCA is overwhelmed with these really nasty fraud cases. But it's a question of picking your target, and that's not easy when you have a lot of people who deserve it."
He says there were other means of achieving its ends, rather than naming individuals. "I know of one case with a major problem where the FCA put in a section 166 skilled person who actually was fairly useless at spotting the real issues or extent of the problem," he says.
"However, the process and cost involved had the effect of making the firm sit up and realise that it had a serious issue. This resulted in significant compliance changes and an internal review, which achieved far more than any publicity could have done."
Samuel adds that instead of naming companies it is investigating, the regulator should keep the details of its investigations generic, and let the world know about areas it is investigating.
An FCA spokesperson said: "We are consulting on proposals help promote transparency about our enforcement work bringing confidence to both markets and consumers and improving accountability. The plans sit within a wider range of work which is designed to ensure that any enforcement action we take is timely, focused and delivers impactful deterrence.
"We welcome all feedback and will continue our engagement with the industry, government, parliamentary committees and other stakeholders, even after the formal consultation has closed to ensure we are striking the right balance on these important issues."
