Introduction
In the US, a card game called Fair Play has created a storm in family homes and threatened to create new business for divorce lawyers. Couples are asked to sift through a deck of one hundred cards describing household chores from cooking midweek meals to writing thank you notes. 

Each person who claims ownership of a card must commit to doing every part of that task – from conception, to planning to execution.

For example, if you have claimed weekend children’s sport as your task, your duty does not stop at showing up on the pitch side lines in the rain. You have to navigate the minefield that is junior football trial dates, sort the kit once they get into a team, sign up for team updates and hold your tongue when the coach’s daughter gets picked for the starting line up over yours EVERY SINGLE WEEK. And this is just one card out of a hundred.

The point of me using this example is to warn that if you are responsible for too many tasks, it is impossible to give each of them equal attention. And nor should you – some things are more important than others.

When we have a lot on our plates, we need to work smarter, prioritise, invest in labour-saving tools and constantly challenge ourselves that we are focusing on the right things in the right way – boiling the kettle rather than the ocean.

Evolving our approach
At the FCA, just as in many other organisations and households, we do not have the luxury of opting out of multi-tasking. What we can do though is look at how we can be more effective at evolving our enforcement approach and making sure it is in line with our top strategic priorities – which we review every year.

We want our enforcement work to deter harm. It aligns with our objective to protect consumers and markets. Our enforcement action also directly reflects our strategic aims – to reduce and prevent serious harm and test and set higher standards.

In the markets context, we do this by delivering assertive action on market abuse and reducing and preventing financial crime.

Of course, we understand the public and our stakeholders scrutinise the size of the fines we dish out, the number of convictions we secure and the bans we impose.

While delivering justice in specific cases is vital, what is even more important is the overall impact of our strategy: is our enforcement activity acting as the ultimate deterrent?  Is it helping to keep our markets clean and therefore helping to drive growth – one of our secondary strategic aims. 

And be in no doubt: pursuit of growth and international competitiveness does not mean we will back away from tough cases or cool our investigation when the going gets hot.

Quite the opposite. There is a reason that Steve Smart, my co-executive director who joined me after heading the intelligence directorate at the National Crime Agency, and I are known as the ‘Bad Cop, Bad Cop’ double act.

We know that you cannot build sustainable growth and competitiveness without the foundation of a clean market, where investors and consumers and institutions have faith in its integrity. Effective and impactful enforcement is critical to that.

I became a lawyer after watching the TV drama LA Law…For those of you in the audience who are a bit younger, it is like Suits but with some law in the storyline.

I loved the shoulder pads, the legal wrangling and the tension before justice was finally delivered within the neat space of a 60-minute drama, with the lawyer cast as the hero. Alas, real life justice was quite different as I discovered. A case did not go to court within days of you compiling evidence. The work you do as a lawyer is often anonymous. The wheels of justice can turn slowly and occasionally grind into reverse.

Increasing transparency, speed and collaboration
You may have read our interview with the Financial Times about our new enforcement strategy.

You will know then that we want to deliver impactful deterrence through our enforcement activity. We want to increase transparency around this work, quicken our pace and strengthen our focus.

As part of that, we have set out our proposals for a new approach to publicising enforcement investigations. It is on our website for consultation. So how will our enforcement approach differ?

Firstly, we are going to be more open about it. The first rule of enforcement club is that you do in fact talk about enforcement club.

Enforcement is not just about the prison sentences, fines and censures. It is about communicating what our plan is and deterring bad behaviour. 

For while it is satisfying to see criminals going to jail, it is even more satisfying if we deter them from committing crime in the first place. Not to mention cheaper for firms and taxpayers.

It is just as more important – arguably more so – to get our messages out to the market participants who are doing the right thing.

We want to show to the market what we expect, how others have gone wrong and to show the way forward. And we also want and need them – you – working with us.

We want to be more transparent about what we investigate, so firms will be reassured whether they are on the right track (and can pivot if they are not) and so that the public can be reassured that we are on the case.

We want to drive our own accountability by shining a light on the efficiency and pace of our investigations.  So, where it is in the public interest to do so, we propose to announce the opening of an investigation into a firm.  We will also be upfront about our progress and about when we have had to close a case.

We must also tackle the delay between misconduct occurring and penalty being imposed if we are to boost confidence in our markets. The longer it takes for outcomes to be determined or justice to be served, the longer it takes for us to send important signals to the markets we oversee about what we consider serious misconduct to be. We cannot control the whole timeline of justice, for example when a case goes to trial, but we can speed up our investigations and prioritise the cases that will have the most impact.

More tools in the box
Enforcement should not be and is not our only tool in tackling harm.

We have plenty of other powerful tools too. And all of these are effective at solving harm in real time. This part of our regulatory practice is growing and will continue to grow.

As an organisation, we have acted with greater assertiveness in preventing those who can’t or won’t meet our standards entering the regulated sector. And we are more swiftly removing those who are already there and don’t.

For example we deploy business restrictions and use it or lose it powers for those holding unused regulatory permissions.  Every day, we are speaking to listed issuers to check that they are disclosing all the information that they need so we can ensure a level playing field for all market participants. This work is done quietly and behind the scenes, but it makes a real contribution to the integrity of our markets.

As well as all our consumer-facing education campaigns such as ScamSmart, look out for our latest edition of MarketWatch which gives firms specific advice on how to avoid being sucked into criminal activity conducted by organised criminal groups.

These risks are very real and require a whole market response – all of you in this room have a critical role to play.

We need industry and regulators pulling together to stop opportunistic market abuse. We are committed to this as we know the corrosive effects it can have on the integrity of our markets.

Through our approach we will focus on a streamlined portfolio of cases through we can deliver the greatest deterrent impact, acting at pace and with greater transparency.

Crime and misconduct must not pay
Hitting wallets seems to also hit appetites for misconduct in the first place. Since last April, we have imposed fines of £41.5million.

But where appropriate, we will also refrain from imposing a direct penalty if to do so would imperil the chances of getting money back to consumers.

We will prioritise compensation to consumers over fines where that is the right thing to do.

For example, we took action to deliver redress to investors in the Woodford Equity Income Fund. Now the scheme has been approved, investors will see up to £230 million returned to them. We do also have the power to compel restitution from firms, issuers or individuals in market abuse cases.

There are huge costs to consumers, to our markets and the wider economy from when there is mismanagement, misconduct and crime.

The total value of frauds from the convictions we secured since April 2023 amounts to just under £24 million, impacting more than 360 investors and multiple financial institutions.

That is just for the closed cases.

The total for the cases that have not yet been resolved from April last year amounts to tens of millions of pounds. In some cases, thousands of potential victims are implicated.

A busy month for enforcement
 February has been a busy month for us.

The High Court approved the Woodford Equity redress scheme.

We issued a fine of nearly £32,000 to a former director of London Capital & Finance, Floris Jakobus Huisamen, who recklessly signed off misleading financial promotions. He has been banned from working in financial services.

With support from the National Crime Agency, we launched a major operation to arrest 3 individuals on suspicion of insider dealing with a 4th interviewed under caution.

We are awaiting the sentencing of Guy Flintham for a £19 million investment fraud after he pleaded guilty to defrauding 240 investors.

And we secured the conviction of Mohammed Zina, a former Goldman Sachs analyst, who was found guilty of six offences of insider dealing and 3 offences of fraud.

The Zina case is a timely reminder that even a seemingly clear-cut case can involve a huge amount of work and result in a 12-week trial.

Mr Zina received 22 months in prison. The sentencing judge said his crimes had ‘struck at the heart of financial markets and the trust the public places in them’.

He had used a £96,000 Tesco home improvement loan to bankroll his trading in stocks and shares using inside information about mergers and acquisitions that were being handled by his employer, turning a profit of £140,000.

Mohammed Zina was 29 at the time the insider dealing started, with a glittering career in front of him.

All of that squandered for less than the value of the average Goldman bonus.

Our ongoing pipeline of investigations involves cases that are far more challenging and complex, with multiple markets, jurisdictions and products, highly technical trading and many suspects determined to evade our scrutiny.

We are not juggling plates; we are juggling boulders. And make no mistake, we have the appetite to tackle tough cases.

The time is ripe for us to review how we do this with the maximum impact.

Data driven tools
Going forwards, our approach will be ever more data and technology driven.

This we believe will aid us in highlighting cases as well as speeding up investigations.

We have a dedicated cyber forensics team which processed 150 terabytes of data and 17 million documents onto our evidence management system in 2023.

We will have increased our trading data coverage from 500m records a day to over 1bn over the next few months, deepening our coverage of both equity and FICC (Fixed Income and Commodities) markets.

We have improved our analytics and alerting capability making it more responsive to changing market conditions. This is putting us on the front foot to spot ever-more complex market abuse from organised criminal groups.

And we have made advances to work smarter with our data, clashing different markets datasets to spot anomalies that point to infractions.

Only last week the CEO of Bytes Technology Group resigned after failing to make notifications of his share dealings as he was required to do under our rules. This followed work by our Market Oversight team to identify missing notifications using our trading data.

We are looking at AI in order to assist with some of this process and are adopting more automation across the organisation. We are also looking to unblock advancements and investment in AI in market surveillance through our AI Tech Sprint, which will launch shortly. The Tech Sprint will facilitate the development of these tools in the UK and aims to provide certainty for firms by developing a framework for supervision which balances the needs of explainability and useful innovation in the interests of the market.

We know criminals are increasingly turning to technology to warp markets:  We saw the markets plunge when an AI deepfake of the Pentagon supposedly in flames flashed up on social media. Likewise, the Silicon Valley Bank failure exposed how tight the feedback loops can be between a very public discussion on Twitter, and the liquidity position of a financial institution. The precise conditions may have been unique to this failure, but there are clear lessons and warnings for the future.

But we also know that data, surveillance and analytics at the FCA cannot replace your own surveillance efforts and your intelligence. A broker’s insight – whether through your own data or through a conversation with a client will often shed more light on a trade than we can through our own data. Your role will always be crucial in delivering clean markets.

Conclusion
Ultimately, industry, regulators and investors all want the same things: we want our markets to be clean, for our economy to grow and for our lives to be made easier by both of those factors.

Our new enforcement strategy aims to streamline and prioritise our operations, to make sure that our resources have the greatest impact possible.  Cooperation from industry will continue to be crucial.

It is quite telling how Mohammed Zina relied on what he said were failings at his bank as part of his defence. He claimed his employer had not properly trained him and that he was unaware that he was on any insider lists. That the jury was not persuaded of this was in no small part due to evidence from the bank and we were able to demonstrate that his claims were not true. Cooperation from the firm was key – and thankfully they could show they had robust systems in place.

Firms – and many of you here today – are on the frontline. You have access to data about your operations, your employees and your investors.  You must use it.

Please take the time to respond to our consultation on our enforcement publicity policy, which runs until 16 April.  Not everything is about enforcement. Not all justice is about courtroom dramas, despite what LA Law may have shown me all those years ago.

Much of it is about engagement and cooperation and deterrence.

Our evolving enforcement approach will make sure that our markets can continue to flourish and grow on the reputation that they were built on: fair play, cleanliness, integrity and operational effectiveness.