The number of raids conducted by the FCA has fallen to the lowest point since before the financial crisis, data from city law firm RPC shows.
In the past year there have been seven dawn raids by the FCA, a fall of 81 per cent from the 37 raids in 2009 during the financial crisis.
However Richard Burger, partner at RPC, says the drop should not be misinterpreted as the FCA relaxing its stance on financial crime, adding that while major investigations – such as those into Libor or Forex rigging – have wound down, criminal investigations such as insider dealing remain at the fore.
He says: “Some commentators are reading too much into the 97 per cent drop in FCA fines last year, but the FCA has not gone soft on proactive enforcement action.
“Undertaking raids sends a clear deterrent message to the City of London and to the boiler room operators. If the FCA can make a good case for a raid then the FCA will do it.”
Previous research by RPC found that FCA fines dropped from £905m in 2015 to £22m in 2016.
Burger says: “The FCA knows that if it is seen as not being proactive enough in the area of financial crime then it will come under tremendous pressure from politicians.”
He adds that the FCA is still primed to clamp down on unregulated individuals “defrauding” UK investors.