2012 vision: Increased regulatory exposure looms
Wednesday 25 January 2012 - by Lista M Cannon and Chris Warren-Smith
The consequences of these allegations are serious: 40 per cent of UK respondents stated that whistleblower allegations led to an internal investigation, 20 per cent reported a regulatory investigation and 33 per cent reported that third party proceedings followed. Over half of all respondents were subjected to third party proceedings as a result of whistleblower allegations, an increase from 46 per cent in 2010.
Further enhanced supervision, pressure on regulators from the public, press and government for tougher regulation, and significant enforcement including increasing penalties seem set to form the prevailing financial regulatory climate in 2012.
Consequently, financial sector businesses, together with their advisers, will need to devote significant time and resources to managing and handling legal and regulatory proceedings as efficiently as possible. Greater cross-border co-operation between regulators suggests that financial sector businesses will need to be ready to handle these matters on an international scale.
Lista M Cannon and Chris Warren-Smith are partners in the global disputes and investigations practice at Fulbright & Jaworski International LLP in London.
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Will markets in 2012 have a tougher time than 2011?