The financial regulator is ‘incompetent at best, dishonest at worst’ according to a scathing assessment of its record by a group of MPs and peers.
In a report published today, the Financial Conduct Authority (FCA) is found to have suffered from ‘very significant shortcomings’ in its ability to tackle fraud and other issues while its leadership remains ‘opaque and unaccountable’.
An almost three-year-long investigation into the regulator, which gathered evidence from 175 whistleblowers, fraud victims and former FCA staff, revealed a culture in which ‘dishonesty and deceit’ is commonplace.
The FCA is ‘widely seen as incompetent’, the report declared.
Toothless: In a new report, the Financial Conduct Authority is found to have suffered from ‘very significant shortcomings’ in its ability to tackle fraud and other issues
Those who raised issues at the organisation said they were ‘criticised, bullied and sidelined’ and alleged that the regulator ‘actively discourages staff from raising serious and challenging questions’.
The All-Party Parliamentary Group on Investment Fraud and Fairer Financial Services, which authored the report, is comprised of around 30 MPs and a dozen peers from the House of Lords.
The report concluded that the picture painted of the FCA ‘was not pretty’ and that its investigation had uncovered ‘tragic tales of regulatory failure causing enormous financial and emotional distress’.
Current and former employees described the watchdog as having the ‘worst staff culture’ they had ever experienced, characterised by a ‘lack of trust’ and ‘astonishing arrogance’.
Others accused the regulator of acting ‘in bad faith’ and being ‘culturally and economically aligned with banks and other large authorised firms’ making it ‘disinclined to act against their interests’.
‘The picture painted is not pretty,’ the report said. ‘The FCA is seen as incompetent at best, dishonest at worst. Its actions are slow and inadequate, its leaders opaque and unaccountable.’
The committee called for a series of reforms and, if it resisted the changes, suggested a Royal Commission be set up to take responsibilities away from the FCA and give them other institutions.
But an FCA spokesman said: ‘We sympathise with those who have lost out as a result of wrongdoing in financial services, however we strongly reject the characterisation of the organisation. We have learned from historic issues and transformed as an organisation.’
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