The UK Financial Conduct Authority (FCA) has suggested that “impactful deterrence” will form an increasingly important part of its future strategy. In the latest consultation (CP26/19) on potential changes to its Decision Procedure and Penalties Manual (DEPP) which was published in June, the FCA outlines its intention to raise penalty thresholds against individuals. It proposes an uplift for the most serious cases of individual market abuse, elevating the minimum penalty from £100,000 to £150,000 and enhancing the regulator’s freedom to increase penalties for notably wealthy individuals.
As a result of appellate scrutiny, which has led to sanctions being cut, this upward shift clearly indicates the future direction of travel.
At the conclusion of several recent cases, the Upper Tribunal has reduced FCA penalties. In February, it handed down a decision concerning Mr Stephen Burdett and Mr James Goodchild - former senior office holders at Synergy Wealth and Westbury Private Clients, respectively.
After upholding the regulatory ban on both men for recklessly exposing pension holders to unsuitable high-risk investments, the Tribunal cut Burdett's penalty from £311,762 to £265,071 having accepted evidence of tax paid on the relevant financial benefit, while Goodchild's penalty was left unchanged at £47,600.
The proposed reforms offer a potential solution that may help to deal with the challenge concerning individuals: how to maintain credible deterrence when senior remuneration has been deferred, made conditional, clawed back or otherwise impacted by another arm of the enforcement process.
Enforcement against individuals remains a critical concern. In her recent speech at the International Bar Association (IBA) Anti-Corruption Conference, Therese Chambers, the FCA’s joint executive director of enforcement and market oversight, highlighted individual accountability as a key priority. More broadly, holding individuals to account mirrors the publicly-stated enforcement objectives of assorted prosecutorial agencies, both in the UK and the US.
FCA's penalty methodology
A five-step methodology forms the cornerstone of the FCA’s current penalty framework (DEPP 6.5B):
• Step 1: Seeking to remove any direct financial benefit derived from the breach.
• Step 2: Determining a figure which reflects the gravity or seriousness of the offence: for individuals in non-market abuse cases, this is based on a percentage of “relevant income” for the relevant period, including salary, bonus, pension contributions, share options and share schemes. Percentages range from zero to 40%.
• Step 3: Allowing adjustment for aggravating or mitigating factors. The FCA’s starting point is that serious financial hardship may reduce a penalty, but only where payment would cause the individual’s net annual income to fall below £14,000 and capital below £16,000 over a reasonable period, normally no more than three years (DEPP 6.5D.2).
• Step 4: Adjusting the penalty to ensure that it has a deterrent effect, particularly if the individual's wealth or income is significantly high.
• Step 5: Applying a percentage reduction if the individual agrees to settle early. Under DEPP 6.7, a stage 1 early settlement can reduce the financial penalty by up to 30%, although this does not apply to disgorgement.
FCA proposals
They may be narrow in scope, but these proposals have a wide potential impact. Under CP26/19, the following changes are under consideration:
(a) raising the minimum penalty for the most serious individual market abuse cases from £100,000 to £150,000;
(b) clarifying the treatment of deferred remuneration;
(c) making explicit that penalties for wealthier individuals may be increased by reference to income and assets for deterrent effect;
(d) raising income and capital thresholds,
(e) providing greater flexibility as to who makes settlement decisions in certain cases; and
(f) extending the penalty framework to cover cryptoasset market abuse to reflect new regulatory powers in this area.
Specifically, the FCA Handbook would become more closely aligned with recent Tribunal decisions in the treatment of deferred remuneration and shares. It would also deliver a clear message: where an individual’s wealth or remuneration risks an insufficiently punitive penalty being levied, the FCA wants greater freedom to make an upwards adjustment. This would be a significant regulatory recalibration: from an exclusively income-based approach towards personal deterrence that is based on a wider assessment of individual circumstances.
Inevitably, UK authorities may increase fines. But it should be remembered that overall levels of UK regulatory fines are notably much lower than those issued by their US counterparts. According to the FCA, aggregate financial penalties in 2024/25 totalled £186,412,508 , which was comprised of £179,096,835 against firms and £7,315,673 against individuals.
By contrast, US figures are of a different magnitude. According to the Securities and Exchange Commission (SEC) Enforcement Results for the FY2025, the "Commission filed 456 enforcement actions, including 303 standalone actions and 69 “follow-on” administrative proceedings seeking to bar or suspend individuals from certain functions in the securities markets based on criminal convictions, civil injunctions, or other orders". Meanwhile, orders for monetary relief totalled $17.9 billion , comprised of $7.2 billion in penalties and $10.7 billion for disgorgement.
The FCA's highest individual fines in the first half of 2026 include: Darren Reynolds (£2,037,892), Richard Howson (£237,700), Richard Adam (£232,800), Zafar Khan (£138,900), Bhavesh Hirani (£56,000) and Dipesh Kerai (£52,731). Last year, the FCA listed James Staley (£1,107,306), Jean-Noel Alba (£1,049,500), Diego Urra (£223,400), and Russell Gerrity (£309,843) as recipients of the highest individual fines.
Disciplinary measures are also imposed. According to FCA enforcement data for 2024/25, the agency issued 13 prohibitions and three public censures, and opened approximately 80 cases against individuals. The SEC’s key focus last year was charging individuals for violating federal securities laws. In its 2025 results, the SEC stated that it had obtained orders barring 119 individuals from acting as officers and directors of public companies. Notably, these civil outcomes often occur in parallel with Commodity Futures Trading Commission (CFTC) enforcement and Department of Justice (DOJ) criminal prosecutions.
Challenges faced by individuals
For individuals, the penalty formula is not the only practical challenge, they must also navigate the procedural and evidential environment in which they present their defence. Once a firm has been investigated, criticised or agreed findings, an individual may also have to deal with a record that has been influenced and reshaped without their full participation.
The point is most acute in cases where firm-level findings have preceded, or been published simultaneously with, action against individuals.
In December 2021, the Prudential Regulation Authority (PRA) issued a Final Notice against Metro Bank and imposed a £5,376,000 penalty for failings associated with its risk-weighted assets. Having already published Decision Notices for two former executive directors of Metro Bank in November 2022, the FCA then issued its own Final Notice in December 2022, fining Metro Bank £10 million.
For individuals, this shows that documents produced in the context of a firm-level finding might help to construct the factual architecture in subsequent regulatory action, criminal prosecution or civil claims against them. A potentially significant advisory problem may then arise. An employer would be pressured by incentives to settle, preserve market confidence and draw a line under historic misconduct. In turn, this might diverge sharply from an individual’s interest in contesting causation, knowledge, responsibility and fairness.
The incentive to settle and minimum fines calculations
Ultimately, higher minimum fines would only serve to compound these pressures. Any individual who is contemplating settlement already has to weigh diverse factors: reputational damage, prohibition risk, legal costs, employment consequences, and the possibility that contested proceedings might result in a worse outcome. A higher starting point, particularly for serious market abuse, would increase the cost of losing and could make the 30% stage 1 discount more attractive.
The FCA acknowledges that fines could be reduced for mitigating factors, serious financial hardship and early settlement. But uncertainty persists: it is not yet clear how those reductions would interact with any proposed “minimum” level. If a £150,000 minimum came to be treated as a genuine floor after mitigation and settlement, material change would apply to the settlement calculus. If a pre-discount anchor were applied, then individuals might still achieve lower outcomes. Ultimately, that distinction will become a material factor in almost every serious relevant case.
