Compliance Corner: Citigroup, UK Financial Conduct Authority, HSBC

Editorial Staff

24 May 2024

UK regulators have fined Citigroup Global Markets Limited (CGML), part of US-listed Citigroup, a total of £61.6 million (around $79 million) over failures that saw an employee erroneously sell far more equities than intended. This “fat finger” case caused a “flash crash” in European stocks in 2022.

The yesterday fined two HSBC entities: HSBC UK Bank, HSBC Bank plc and Marks and Spencer Financial Services (HSBC) £6.28 million ($7.98 million) for customer treatment failings.

The failures concerned how these business treated clients who were in arrears or experiencing financial difficulty, the regulator said in a statement on 23 May.

Between June 2017 and October 2018, “failed to properly consider people’s circumstances when they had missed payments”, the FCA said. The failings meant that the bank did not always do the right affordability assessments when entering arrangements with people to reduce or clear their arrears.

“Sometimes it took disproportionate action when people fell behind with payments, which risked people getting into greater financial difficulty,” it continued.

“The failings were caused by deficiencies in HSBC’s policies and procedures and the training of their staff, as well as inadequate measures to identify and address instances of unfair customer treatment,” the FCA continued.

In 2018, HSBC identified that there were issues with its handling of customers in financial difficulty and notified the FCA. The bank invested £94 million in identifying the issues and putting them right. HSBC also issued redress payments totalling £185 million to over 1.5 million customers, the regulator said.

The FCA took HSBC’s remediation and redress programme into account when setting its fine. HSBC also agreed to settle the case and qualified for a 30 per cent discount to the financial penalty imposed, which would otherwise have been £8.971 million.?