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Financial Conduct Authority (FCA) chief executive Nikhil Rathi has warned MPs that the government’s call for the City watchdog to help boost economic growth would mean trade-offs that could see an increase in mortgage defaults, insider trading cases, money laundering and bad investment advice. He told the Treasury Select Committee that "one or two things may go wrong," and "not everything is going to work out." FCA chairman Ashley Alder also suggested that deregulation may mean trade-offs in many areas. MPs also heard that the FCA is concerned about the high cash reserves held by consumers, suggesting that many would benefit from investing in the stock market instead. Rathi also acknowledged the poor financial education among younger consumers, saying it was "not great" that many first engaged with financial products through crypto rather than traditional investments.

 

The Times

City AM

Santander UK has successfully dismissed a lawsuit claiming that banks have a duty to recover funds lost to fraudsters. The case was brought by CCP Graduate School, which lost approximately £415,000 in an authorised push payment (APP) fraud. The High Court ruled that there is no obligation for banks to take action to reverse harm caused to non-customers. The judge noted that if banks were required to act on APP fraud allegations, it would impose an "unacceptable burden" on them. This follows a 2023 Supreme Court decision regarding a similar case against Barclays, which indicated that banks might have a duty to assist customers in recovering funds.

 

Reuters

Tom Hayes, a former City trader at UBS and Citigroup, is appealing his conviction for manipulating the London Interbank Offered Rate (Libor). His barrister, Adrian Darbishire KC, has argued that the 2015 trial was flawed, claiming it was "not a recognisable English jury trial" and had an "Orwellian quality." Hayes was convicted of conspiracy to defraud and sentenced to 14 years, later reduced to 11 years on appeal. The Supreme Court is now considering whether Libor submissions influenced by trading advantages are automatically dishonest. "The jury had been told in the clearest possible terms 'trading advantage' means not genuine and honest," Darbishire said. He called this a "false dichotomy" and a "wrong turn."

 

The Times

More than 8,300 investors in Neil Woodford’s former fund have joined a legal case against Hargreaves Lansdown. RGL Management, which is leading the claim, says it has added 1,700 investors in recent weeks. The claim, which could potentially reach £200m, focuses on Hargreaves Lansdown’s continued promotion of the Woodford Equity Income fund up until its suspension in 2019 despite concerns over the liquidity of the fund. Fund administrator Link Fund Solutions last year agreed to a settlement scheme for former investors, avoiding a fine from the Financial Conduct Authority.

 

City AM

The Fair Work Agency (FWA) is set to gain significant enforcement powers under the Employment Rights Bill, allowing officers to enter homes and seize documents during investigations. This has raised concerns among businesses, with Craig Beaumont from the Federation of Small Businesses saying: "Firms want help to grow, not Captain Clipboard walking into their business premises and homes." The bill, which is currently under scrutiny in the House of Lords, will enable the FWA to compel interviews and conduct searches, mirroring powers typically reserved for police. Critics, including Alex Hall-Chen from the Institute of Directors, have expressed alarm over the "unprecedented powers" granted to the FWA, urging clarity on its intended use. The legislation also introduces various worker protections, including a ban on zero-hour contracts and enhanced rights for flexible working.

 

The Times

The Financial Reporting Council (FRC) has fined PwC £2.9m over its audits of Wyelands Bank, an entity owned by GFG Alliance. The regulator handed penalties to PwC and Jonathan Hinchliffe, the partner who signed off the audit, after they admitted to breaches in relation to six areas of the audit for the financial year ending April 30, 2019. It was found that the audit team failed to properly understand the bank’s lending and adequately consider the risks posed by its exposure to related parties in the GFG Alliance. PwC’s initial fine of £4.5m was reduced due to the firm’s co-operation. Mr Hinchliffe’s fine was reduced from £55,000 to £33,412.

 

Financial Times

Reuters

The Times

The Guardian

The Competition and Markets Authority (CMA) says Ticketmaster may have breached consumer protection law by misleading Oasis fans with unclear pricing over tickets for the band’s reunion tour. The CMA has instructed Ticketmaster to change the way it labels tickets and reveals prices to consumers. While the regulator acknowledged that Ticketmaster has made some changes to its business practices, it said it does not consider these changes sufficient to address the concerns.

 

Sky News

BBC News

Financial Times

The Times

MPs have questioned the Financial Conduct Authority (FCA) over its management of pre-paid funerals company Safe Hands Plans. This comes after a report from the FCA's complaints commissioner said the City watchdog was "on notice about issues" with Safe Hands but failed to act promptly. Sheree Howard, the FCA's executive director, acknowledged receiving a tip-off in April 2021 but said it was logged while the watchdog was waiting for new legislation to come into force. A Treasury spokesman defended the FCA's actions, saying that the report found no evidence that alternative measures would have changed the outcome for customers.

 

The Times

Rachel Reeves has been warned that high streets may "start to die off" without reform of the "archaic" business rates system. As the Chancellor prepares for her mini-Budget, leaders from the Co-op Group and Kingfisher have urged against increasing the property levy. Retailers face a £7bn increase in costs, with Co-op CEO Shirine Khoury-Haq highlighting the threat to small businesses and local communities. She said: "There is a real danger that we do see our high streets starting to die off, and we can't let that happen." She added: "It's not just retail that suffers, it's jobs, it's local services, it's community well-being and, so importantly, it's the future of our young people."

 

The Guardian

The I

Daily Mail

Daily Mirror

Jan Kubicek, a board member of the Czech National Bank (CNB), has expressed scepticism regarding the potential inclusion of bitcoin in the bank's reserves. He highlighted concerns over the digital currency's legal status and volatility. The CNB, led by Governor Ales Michl, is currently analysing various asset classes for its reserves, with findings expected by October. Kubicek noted that while bitcoin is one option, the bank is also considering international corporate bonds and targeted equity indices. Vice Governor Eva Zamrazilova has also indicated that bitcoin is unsuitable for reserves, echoing sentiments from European Central Bank President Christine Lagarde. The CNB's reserves currently stand at €142.8bn, approximately 45% of the country's GDP.

 

U.S. News

China has released all Mintz employees who were detained for two years following a raid on the US-based due diligence firm's Beijing office in March 2023. The raid marked the start of a broader crackdown on consultancy firms. Foreign business lobbies said at the time that the crackdown damaged investor confidence in the world's second-largest economy. Mintz had been involved in corporate due diligence related to forced labour in supply chains linked to Xinjiang.  A spokesperson from Mintz Group said: "We are grateful to the Chinese authorities that our former colleagues can now be home with their families." The firm operates 12 offices globally and employs over 280 investigators.

 

U.S. News

Microsoft is launching a team of AI cybersecurity agents to combat the rising complexity of cyber threats, which have surged to "unprecedented complexity," according to Vasu Jakkal, vice president of security at the tech giant. The company tracked 30bn phishing emails last year, highlighting the overwhelming volume that human teams cannot manage. These AI agents will autonomously sift through suspicious emails and block hacking attempts, primarily serving IT and cybersecurity teams. The agents will be integrated into Microsoft's Copilot tools, ensuring they have defined roles and limited data access, and adhering to a "zero trust framework."

 

Sky News

The FT's Sarah O'Connor wonders whether the traditional transfer of skills between experts and learners can survive the age of artificial intelligence, and says professional business models may need to change.

 

Financial Times

Non-executive directors of UK companies are bracing for takeover bids, according to data from investment bank Peel Hunt, with 80% saying their companies are more vulnerable to being acquired. The poll saw 92% of non-executive directors say they are expecting an increase in takeovers of UK companies this year. It was also found that just 15% are sure they could confidently assess shareholder appetite for an offer if their firm was targeted for a takeover.

 

City AM

The Swiss government says it has agreed a package of measures to protect workers' pay, in a move which potentially removes an obstacle to the approval of a new agreement aimed at deepening ties between the country and the European Union. Employers' associations and trades unions and the country's cantons agreed to 13 steps to protect high wages in Switzerland from being undercut by EU workers, and the Swiss government announced the proposal of an additional measure to give improved protection against dismissal for elected employee representatives. The package of measures is aimed mainly at EU-based firms which establish operations in Switzerland.

 

Reuters