The Naughty List: Violation Tracker UK’s Top 5 Corporate Violators of 2023

December 22, 2023

2023 has seen some big fines and penalties handed down by UK regulators to corporations for misconduct and violations. In this piece, we’ll specifically be reviewing the top 5 fines and penalties received by corporations this year from regulators, which total a massive £805 million. Let’s take a closer look at the events and issues surrounding these top 5 enforcement outcomes.

Source: Entain Group

1. Entain plc – £615,000,000

In a Deferred Prosecution Agreement (‘DPA’), Ladbrokes owner, Entain plc, agreed to pay £585 million in penalties and disgorgement of profits, in addition to making a £20 million charitable donation and paying costs of £10 million, amounting to £615 million in total. This case was brought by HM Revenues and Customs, with the DPA being entered into with agreement by the Crown Prosecution Service in relation to bribery offences at Entain plc’s now formerly owned betting business, Sportingbet.

This penalty amounts to the second-biggest fine imposed under a DPA, with most DPA’s being undertaken in accordance with the Serious Fraud Office. DPA’s are an unfortunate import from the U.S., whereby an agreement is reached between a prosecutor and an organisation, with the agreement allowing a prosecution to be suspended provided certain conditions are met. However, this is far from Entain’s first violation, with a record of 14 previous enforcement actions, and last year having a £17 million fine imposed by the Gambling Commission which was paid out to various social responsibility causes.


2. Auden McKenzie and Actavis UK – £130,000,000

Auden McKenzie and Actavis UK were handed a £130 million fine by the Competition and Markets Authority (‘CMA’) in relation to them abusing a dominant market position to increase the price of hydrocortisone tablets over a decade by over 10,000%.

The regulator found that this was a huge increase in price, which was ultimately at the expense of the National Health Service (‘NHS’). Both firms, who are now owned by the Indian pharmaceutical company Intas Pharmaceuticals, had an appeal rejected by the Competition Appeal Tribunal (‘CAT’) for fines imposed in 2021. The original fines for the abuse of dominance totalled £155.2 million, but this was reduced by £26 million to £130 million. This is the highest ever fine by the CMA which has been upheld by the CAT.

Auden McKenzie has a record of one previous violation for price-fixing and anti-competitive prices in 2020, where the CMA fined it £2.8 million. Actavis UK, now known as Accord Healthcare, also has one previous fine for £1.5 million by the CMA for price-fixing and anti-competitive practices in 2016.


3. KPMG LLP – £23,874,365

KPMG LLP appeared in our naughty list last year at number 5; this year they have moved up by two places. In October 2023, KPMG LLP and KPMG Audit PLC were issued two final settlement notices and fines totalling almost £24 million by the Financial Reporting Council (‘FRC’) for their audits of the now collapsed construction giant Carillion PLC.

KPMG LLP was initially fined £26.5 million, but this was reduced by 30% to £18.5 million plus costs, given their cooperation with the regulators. KPMG Audit was similarly initially fined £3.5 million, but this was also reduced by 30% to £2.4 million for the same reason. Two individual auditors were also involved in the case and were fined for their individual parts.

This was a record fine for the FRC, who stated that this was a ‘textbook case study in failure’ by KMPG on their audit of Carillion between 2014 and 2017. The FRC stated that the failures had not always been purposeful, but the result in not auditing Carillion to the proper standard was not seeing the financial difficulty they were in. This, according to the FRC, ended in the collapse of Carillion, which had a ‘significant and painful impact on employees, pensioners, investors, critical infrastructure projects, local communities and taxpayers’. KPMG has previously had 39 enforcement actions against them, 38 of which were for accounting fraud or deficiencies.


4. Erith Contractors Ltd and Erith Holdings Ltd – £17,568,800

On the database, the fourth largest entry for 2023 is shown as Lighthouse Advisory Services Limited. However, as this analysis is looking at fines and penalties specifically given by regulators, this case is being excluded here. Lighthouse was censured by the Financial Conduct Authority (‘FCA’) for investor protection violations between 2015 and 2019. Censuring is a statement made by a regulator acknowledging a violation has occurred, but it is not a fine. In this case, Lighthouse’s new parent corporation Quilter Financial Planning Limited redressed the violation by paying customers back in excess of £23 million before the FCA investigated the case. Therefore, the FCA released a statement on the case but did not fine them.

Therefore, the fourth case being counted here was a fine given to Erith by the Competition and Markets Authority (‘CMA’). The CMA fined a total of 10 construction firms for illegally colluding to rig bids for demolition and asbestos removal contracts involving both public and private sector projects. Of these 10, Erith Contractors and Erith Holdings were fined the most. This is reportedly due to them denying their involvement in the collusion, and therefore their fine was not reduced.

Along with this fine, the CMA secured a disqualification for almost six years for one of the company directors of Erith. This was a complex and large-scale investigation by the CMA from 2019 to 2023, with the £17 million fine to Erith is expected to be paid in full by 2027.


5. ED&F Man Capital Markets Ltd – £17,219,300

ED&F Man Capital Markets has agreed to pay a £17.2 million fine in settlement of a finding by the Financial Conduct Authority (‘FCA’) that the company engaged in and collected fees for trading strategies designed to enable its clients to illegitimately reclaim tax from the Danish Authorities. The offences occurred between 2012 and 2015, with it being established that ED&F’s clients gained £20 million from the illegitimate tax reclaims, while the firm itself made £5 million in fees from the fraud.


2023: Corporate Violations Takeaway

The top 5 fines for 2023 amounts to an eye watering £805 million. Last year, the top 5 fines totalled £502 million. However, in 2022 there were a total of 10,000 known enforcement actions carried out by regulators against corporations as shown on Violation Tracker UK, whilst 2023 has seen a very slight decrease in known enforcement actions against corporations as shown on the database with a total of 9,483.

Overall, it’s still been a busy year for regulators and corporate violators alike. For now, everyone at Good Jobs First and Violation Tracker UK would like to thank you for your support and wish you a Happy Christmas and prosperous New Year! We look forward to writing more blogs on corporate violations and regulators in 2023 and providing more insights about the data.

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