2024 Sees Unprecedented Surge in Global Regulatory Fines, Reaching $19.3 Billion

In 2024, regulatory enforcement has reached unprecedented levels, evidenced by a staggering total of $19.3 billion in global fines. This remarkable figure reflects the increasing vigilance of regulators worldwide as they tackle financial crime, compliance failures, and governance breaches across various sectors.

Significant Increase in Regulatory Actions

According to the Corlytics database, the total enforcement amount for the year stands at $19,288,397,217. The third quarter of 2024 saw a particularly high volume of enforcement actions, underscoring the urgency with which regulatory bodies are addressing corporate misconduct.

Major Enforcement Actions of 2024

• FTX Penalty: The cryptocurrency exchange FTX faced the largest enforcement action of the year, with a monumental penalty of $12.7 billion imposed to compensate victims of its fraudulent activities. This penalty represents the largest recovery in the history of the Commodity Futures Trading Commission (CFTC).
• TD Bank Fines: TD Bank incurred a cumulative fine of $3 billion from various US regulators due to anti-money laundering (AML) violations. Key penalties included a $1.7 billion criminal fine from the US Department of Justice (DOJ) and a $1.3 billion penalty from the Financial Crimes Enforcement Network (FinCEN).

Regulatory Focus on Compliance and Governance

Susie MacKenzie, the Head of Legal and Regulatory Analysis at Corlytics, remarked, “The exceptional volume of enforcement activity in 2024 signifies a clear commitment from regulators to hold firms accountable for compliance failings.” This trend emphasizes the necessity for corporations to adopt proactive measures in addressing regulatory risks and strengthening internal controls.

Sector-Specific Scrutiny

2024 has also seen intensified scrutiny across various sectors:

• SEC Action Against Genesis: The SEC imposed a $21 million fine on Genesis Global Capital for failing to register its retail crypto lending product, spotlighting ongoing issues in the crypto lending landscape.
• UK Neobanks Under Fire: In the UK, the Financial Conduct Authority (FCA) imposed nearly £30 million in fines on Starling Bank due to financial crime failings, highlighting growing regulatory pressure on fintech companies.
• PWC Fined: The FCA made headlines by fining PwC for failing to report suspected fraud, signaling a significant shift in governance accountability.
• Greenwashing Action: The Australian Securities and Investments Commission (ASIC) took action against Mercer Superannuation, imposing an £11.3 million penalty for greenwashing practices.

Importance of Recordkeeping and Internal Controls

Recordkeeping failures have become a focal point for regulators, especially in the US. The SEC and CFTC issued penalties to firms that failed to monitor off-channel communications, emphasizing the need for financial institutions to enhance their internal controls over communication channels.

Compliance Programme Deficiencies

In 2024, deficiencies in compliance programs and control failures led to significant enforcement actions. Many penalties were linked to weaknesses in AML compliance frameworks, underscoring the importance of having robust policies and procedures in place.

For further insights and to download the full enforcement report, click here.