Reynolds Porter Chamberlain (RPC) said there were 15 £1m-plus fines issued by the Financial Services Authority (FSA) last year worth £86.9m, up 216 per cent from £27.5m the year before when there were eight.
According to RPC the average fine handed down last year by the FSA was up by 49 per cent on the previous year from £739,284 to £1,099,159.
The firm also warned that these fines were issued before the implementation of a new policy which could see fines treble again in the coming year, as the scale of the FSA’s enforcement work makes it more reliant on fines for its funding ahead of it’s absorption into two new regulatory bodies.
Jonathan Davies, partner in RPC’s Financial Services team, said: "This is quite an extraordinary cranking up of the FSA’s enforcement activity. The FSA has now begun the internal reorganisation that will result in its replacement and these fines show that it is making every effort to go out with a bang."
The FSA is currently preparing to be split into two bodies, the Financial Conduct Authority (FCA) and the Prudential Regulatory Authority (PRA). According to RPC, all but one of the fines collected in the last 12 months would, under the new split, have come under the jurisdiction of the FCA.
Davies added: "A significant concern we hear from clients is that the two new regulators will compete with each other to set the highest fines, putting substantial upward pressure on the amount of fines the City gets hit with each year."
Due to the number of fines collected in the last year, firms will pay two per cent less to fund regulation this year than they did last year, despite a 10 per cent increase in the FSA’s funding requirement from £454.7m last year to £500.4m for 2011/12.