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The UK Financial Conduct Authority (FCA) has clarified that serious bullying and harassment in financial firms constitute misconduct under its rules. Previously, the classification of such behaviors as conduct breaches was often unclear for firms other than banks.
Effective September 1, 2026, these regulations will encompass approximately 37,000 additional regulated firms, aiming for consistent standards across the financial services sector. Substantial cases of poor personal behavior will also be mandated for inclusion in regulatory references, similar to financial misconduct, to prevent individuals from avoiding accountability by changing employers.
The FCA is consulting on further guidance to aid firms in implementing these changes, considering feedback on earlier drafts. This guidance addresses how firms should evaluate non-financial misconduct, including social media use and private life behavior, when assessing an individual's fitness for financial services roles. The consultation period for this guidance extends until September 10, 2025.

The study investigates the influence of national culture on the severity of global #bank#misconduct. It finds that cultural traits such as over-confidence and #uncertainty avoidance play a significant role in determining misconduct levels. The research underscores the importance of #regulatory measures and #supervisory independence in countering cultural effects on #financial#malfeasance. These findings hold implications for #regulators, #policymakers, and professionals within the #bankingsector.

The study analyzes how #cybersecurityrisk impacts #clawback policy adoption in #us listed firms from 2008-2018. It finds that rising cybersecurity risk increases clawback adoption, influenced by business goals, management preferences, and market efficiency. Stronger tech commitment and non-co-opted boards reduce this effect, showing firms consider clawbacks as preventive against #misconduct, incorporating cybersecurity risk.

Local communities exposed to #fraudulent #investmentadvisory firms tend to withdraw deposits from their affiliated #banks, even though the banks are not involved in the #misconduct. The #reputationalrisk is more significant when banks share names with fraudulent advisory firms or are located in areas with high social norms. The author establishes causality by exploring a quasi-natural experiment in which #fraud is likely exogenously revealed.

#operationalrisk #oprisk #fraud #marketabuse #riskmanagement"Our DD analysis reveals that #workingfromhome lowers the likelihood of securities #misconduct; ultimately those working from home exhibit fewer misconduct alerts."

In #corporategovernance, where boards are being held liable for #misconduct based on #operationalrisk. Operational misconduct is a critical source of #director#liability and should be given the same attention as #financial#mismanagement. Operational risk marks a fundamental shift in the way boards monitor the firm. Judicial doctrine is changing the way boards manage operational risk, avoid liability, and protect stakeholders' lives and the society at large.