Rory Spillman, Duncan Grieve and Adriano Stagni examine what the FCA’s penalty reforms mean for individuals in Thomson Reuters Regulatory Intelligence

Increased deterrence looks set to become a key objective for the UK’s Financial Conduct Authority (FCA). In CP26/19, its latest consultation on changes to the agency’s Decision Procedure and Penalties Manual (DEPP) published last month, the FCA signals its intent to upgrade enforcement against individuals. Proposed amendments include raising the minimum penalty for the most serious cases of individual market abuse from £100,000 to £150,000 and giving the regulator greater freedom to increase penalties for notably wealthy individuals.

Following recent appellate scrutiny, which has led to sanctions being pegged back, this upward shift indicates the direction of travel for fines on individuals.

FCA penalties have been reduced in multiple cases before the Upper Tribunal, which handed down a decision in February concerning Mr Stephen Burdett and Mr James Goodchild (former senior office holders at Synergy Wealth Limited and Westbury Private Clients LLP, respectively). Having upheld the regulator’s decisions to ban both men for recklessly exposing pension holders to unsuitable high-risk investments, the Tribunal reduced Mr Burdett's penalty from £311,762 to £265,071 after accepting evidence of tax paid on the relevant financial benefit, while Mr Goodchild's penalty remained unchanged at £47,600.

In part, the FCA’s proposed reforms offer a potential solution to that problem: how to create and maintain  deterrence that is credible when senior remuneration has either been deferred, conditional, clawed back or otherwise impacted by another limb of the enforcement process.

Enforcement against individuals remains a prime concern. In a recent speech delivered 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 enforcement priority.[1] Holding individual wrongdoers to account mirrors the publicly stated enforcement objectives of other prosecutorial agencies, both in the UK and the US.

FCA's Penalty methodology  

The FCA’s current penalty framework (DEPP 6.5B) centres on a five-step methodology:

• 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 period in question, including salary, bonus, pension contributions, share options and share schemes. Percentages range from zero to 40% for individuals.
• Step 3: Allowing adjustment for aggravating and 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 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

Although narrow, these proposals matter. Under CP26/19, the changes under consideration are:

(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.

Notably, the proposed treatment of deferred remuneration and shares would align the FCA Handbook more closely with recent Tribunal decisions. It delivers a clear message: where an individual’s wealth or remuneration risks  an insufficiently punitive penalty, the FCA wants greater freedom to adjust upwards. That represents a significant recalibration: from a purely income-based approach towards a broader assessment of personal deterrence based on individual circumstances.

The corollary is that UK authorities may increase fines. However, the overall levels of UK regulatory fines are distinctly lower than those issued by their US counterparts.  According to FCA data, the total sum of financial penalties in 2024/25 was £186,412,508[2], comprised of £179,096,835 against firms and £7,315,673 against individuals.

Whereas in the US, according to the Securities and Exchange Commission (SEC) Enforcement Results for the FY2025[3], 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". Orders for monetary relief totalled $17.9 billion[4], split between $7.2 billion of penalties and $10.7 billion of disgorgement.

So far this year[5], the FCA's highest individual fines 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). In 2025, the FCA listed James Staley (£1,107,306), Jean-Noel Alba  (£1,049,500), Diego Urra (£223,400), and Russell Gerrity (£309,843).

The FCA also imposes disciplinary measures against individuals. According to its enforcement data for 2024/25, the regulator issued 13 prohibitions and three public censures, and opened approximately 80 cases against individuals[6]. The SEC previously stated that charging individuals for violating federal securities laws was a key focus for 2025. In its 2025 results, the SEC noted that it had obtained orders barring 119 individuals from acting as officers and directors of public companies[7]. Notably, these civil outcomes frequently occur in parallel with Commodity Futures Trading Commission (CFTC)[8] enforcement and Department of Justice (DOJ)[9] criminal prosecutions.

Challenges faced by individuals

The practical challenge for individuals is not just the penalty formula, it is also the procedural and evidential environment in which they must present their defence. When a firm has already been investigated, criticised or has agreed findings, an individual may have to deal with a record that has been influenced and reshaped without their full participation.

The point is sharply illustrated by cases in which firm-level findings have preceded, or been published simultaneously with, action against individuals. In December 2021, the Prudential Regulation Authority (PRA) published a Final Notice against Metro Bank, imposing a penalty of £5,376,000 for failings associated with its risk-weighted assets. Having already published Decision Notices for two former executive directors in November 2022, the FCA then issued its own Final Notice in December 2022, fining Metro Bank £10 million.

For individuals, this demonstrates that documents produced in the context of a firm-level finding may help to construct the factual architecture in subsequent regulatory action, criminal prosecution or civil claims against them. A potentially acute advisory problem may then arise. An employer would be under pressure with incentives to settle, preserve market confidence and draw a line under historic misconduct, which may diverge sharply from an individual’s interest in contesting causation, knowledge, responsibility and fairness.

The incentive to settle and minimum fines calculations.

Higher minimum fines would only serve to compound that pressure. Any individual who is contemplating settlement must already weigh reputational damage, prohibition risk, legal costs, employment consequences, and the possibility that contested proceedings might lead to 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.

Uncertainty persists. The FCA acknowledges that fines could be reduced for mitigating factors, serious financial hardship and early settlement. But it is not yet clear how those reductions would interact in practice with any proposed “minimum” level. If a £150,000 minimum were treated as a genuine floor after mitigation and settlement, there would be material change to the settlement calculus. If a pre-discount anchor were applied, then individuals may still achieve lower outcomes. Ultimately, that distinction will matter in almost every serious relevant case.

[1] https://www.fca.org.uk/news/speeches/beyond-headlines-unseen-fight-against-financial-crime

[2] https://www.fca.org.uk/data/fca-operating-service-metrics-2024-25/enforcement-data

[3] https://www.sec.gov/newsroom/press-releases/2026-34

[4] Please note that $14.9 billion relates to a single action (SEC v. Stanford International Bank Ltd., et al, No. 3:09-cv-298-N (N.D. Tex. filed Feb. 16, 2009)).

[5] https://www.fca.org.uk/news/news-stories/2026-fines

[6] https://www.fca.org.uk/data/fca-operating-service-metrics-2024-25/enforcement-data

[7] https://www.sec.gov/newsroom/press-releases/2026-34

[8] Commodity Futures Trading Commission

[9] Department of Justice