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In an attempt to improve conduct, global financial regulators have switched their focus from imposing large fines against firms, to making individuals more accountable and improving their ability to detect misconduct earlier, through data and technology. This is according to the annual Global Enforcement Review, now in its fifth year, published by the Compliance and Regulatory Consulting Practice of Duff & Phelps, the global adviser that protects, restores and maximises value. 

Duff & Phelps’ analysis of large enforcement cases collated by Corlytics, the regulatory risk intelligence firm, shows that total penalty amounts globally climbed by 30% between 2015 and 2017 to US$26.5b. However, total penalty amounts globally are forecast to be lower this year, reaching just US$8.1b in the first six months of 2018 compared to US$18.35b over the same period in 2017. This decline is particularly evident in the U.S., UK and Europe. 

Of the total global penalties in 2017, the U.S. remains the dominant force, levying penalties accounting for 94% (US$24.4b) of the global total against firms and 99% (US$621.3m) against individuals.  In the U.S., total penalty amounts against firms and individuals rose by 2% and 23% respectively from 2016 to 2017.

In the UK, total penalty figures rose markedly to £866m in 2017 from £71m in 2016, though this can be explained in part by two large penalties issued separately by the Serious Fraud Office and Financial Conduct Authority totalling £673.3m.  However, penalties against individuals dropped significantly from £18.8m to £970,000 over the same period, the lowest amount on record since the financial crisis in 2008.