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AML & Financial Services Regulatory

United Kingdom: Under the microscope – Managing non-financial misconduct in a regulated environment

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In brief

In an article published in Compliance & Risk Journal, John Bracken and Lorren Martin explore the issue of non-financial misconduct in UK financial services firms, and how best to manage the potential risks.

Key takeaways

  • Regulated firms need to ensure their practices for dealing with non-financial misconduct are robust and transparent. This article explains why this is a key area of focus for regulators, what firms can do to ensure they are prepared, and how to investigate these types of matters in practice.
  • Non-financial misconduct (inappropriate behaviour within a financial services firm which does not directly relate to its financial business activities) is seen as an indicator of poor culture within a firm, meaning there is likely to be an increased risk of poor decision-making, and/or activities in breach of regulatory standards.
  • Firms should do more to identify and address non-financial misconduct through internal policies and procedures, record keeping, proactive intervention and consistency of sanctions.
  • A proper investigatory process needs to be clear as to the nature of the complaint, and the objective of the investigation. Firms should consider who (internally or externally) should carry out the process, and take care when dealing with vulnerable or reluctant witnesses. There may also be regulatory and criminal aspects to bear in mind.

Click here to read the full article. It was published in Compliance & Risk Journal, volume 12, issue 4.

For advice or to discuss what this means for you and your business, please get in touch with your usual Baker McKenzie contact.

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Author

Monica Kurnatowksa is a partner in the Firmā€™s London office. She is recognised by The Legal 500 and Chambers UK as a leading individual. Chambers say she has ā€œimpressive experience of handling complex employment disputes and advisory matters for major clients. She is known for her expertise in trade union matters.ā€ "The breadth of her experience is phenomenal." "She is an outstanding lawyer who provides a first-class service while juggling the intense demands of running high-profile matters on behalf of her clients. She is unflappable, courteous and extremely knowledgeableā€. Monica is a member of the Consultation Board of PLC Employment On-line and is a regular speaker at internal and external seminars and workshops.

Author

Lorren Martin is a senior associate in the Employment & Compensation department in the London office of Baker McKenzie. After training at the Firm, she qualified into the team in 2010 and now advises on all areas of UK employment law, as well as on international deals and multi-jurisdictional projects. She is a leading member of the team's financial services group, having completed secondments to a number of leading banks and financial institutions throughout her career. She is a member of the Firm's Baker Women affinity group as well as a trainee supervisor and associate coach.

Author

John Bracken is an Associate in Baker McKenzie, London office.

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