Category Archives: Regulators

Exclusive: UK water giants recruit top staff from regulator Ofwat

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Demands for an end to the ‘revolving door’ as ex-Ofwat directors are hired by key firms

Two-thirds of England’s biggest water companies employ key executives who had previously worked at the watchdog tasked with regulating them, the Observer can reveal.

Cathryn Ross, the new interim joint chief executive of Thames Water and a former head of watchdog Ofwat, is one of several ex-employees working for water companies in senior roles such as strategy, regulation and infrastructure.

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Thames Water could delay accounts as turmoil in water industry grows

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Firm refuses to say when it will publish annual report; pressure builds on regulator Ofwat

Thames Water has refused to say when it will publish its annual report and accounts, which had been expected by investors next week, as concerns mount over the company’s financial viability.

The risk of delay will add to the turmoil engulfing England’s 11 privatised water companies, after a day in which board directors, ministers and regulators scrambled to restore calm as discussions continued over a potential temporary nationalisation of Thames Water.

The Environment Agency (EA) announced it was sending specialist investigators into water companies across England to secure evidence in the biggest criminal investigation into illegal sewage dumping since privatisation.

The experienced City troubleshooter Sir Adrian Montague was parachuted in to take over as chairman of Thames, a role he will take up on 10 July.

The prime minister’s spokesperson said it was for Ofwat “in the first instance” to monitor the financial resilience of water companies, adding to pressure on the regulator.

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SSE to pay near-£10m penalty over licence breach

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Sum follows Ofgem inquiry into firm’s power generation arm earning ‘excessive payments’ from National Grid

The energy regulator has said the power generation arm of Scottish energy company SSE will pay a near-£10m penalty for breaching the terms of its licence.

Ofgem said a detailed investigation had found that SSE Generation had secured “excessive payments” from the National Grid, the electricity system operator (ESO), during periods of what is known as “transmission constraint”.

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AI should be licensed like medicines or nuclear power, Labour suggests

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Exclusive: party calls for developers without a licence to be barred from working on advanced AI tools

The UK should bar technology developers from working on advanced artificial intelligence tools unless they have a licence to do so, Labour has said.

Ministers should introduce much stricter rules around companies training their AI products on vast datasets of the kind used by OpenAI to build ChatGPT, Lucy Powell, Labour’s digital spokesperson, told the Guardian.

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Cryptocurrency exchange Binance hits back at SEC lawsuit, saying allegations ‘simply wrong’ – as it happened

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This blog is now closed. You can read the full report here: Binance accused of mishandling funds

Here’s a quick summary of what happened today:

The US Securities and Exchange Commission filed a lawsuit against Binance, the largest cryptocurrency exchange, the most serious action taken by US regulators against the company.

The SEC said that Binance operated a shell company, Binance.US, to skirt federal regulators, along with diverting customer funds to outside entities.

Binance issued a response to the SEC’s lawsuit saying that it had been complying with regulators’ “questions” and was looking to negotiate a settlement with the agency.

In the aftermath of news of the complaint, the price of Bitcoin fell below $26,000 for the first time since March.

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South West Water under investigation over leaks and usage figures

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Shares in owner Pennon Group fall as it says Ofwat has launched inquiry into South West Water

South West Water is being investigated by the industry regulator over whether it accurately reported leaks and figures showing how much water is used by its customers.

Pennon Group, which owns South West Water and Bristol Water Group, told its shareholders Ofwat had announced an investigation into the company’s operational performance during 2021 and 2022.

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UK competition watchdog launches review of AI market

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CMA to look at underlying systems of artificial intelligence tools amid concerns over false information

The UK competition watchdog has fired a shot across the bows of companies racing to commercialise artificial intelligence technology, announcing a review of the sector as fears grow over the spread of misinformation and major disruption in the jobs market.

As pressure builds on global regulators to increase their scrutiny of the technology, the Competition and Markets Authority said it would look at the underlying systems, or foundation models, behind AI tools such as ChatGPT. The initial review, described by one legal expert as a “pre-warning” to the sector, will publish its findings in September.

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‘Unprepared’ Twitter among tech firms to face tough new EU digital rules

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Designation as ‘very large online platform’ along with 16 other major names means big penalties for breaches

Twitter is among the tech firms that will face the toughest level of scrutiny under a new European Union regulatory regime for monitoring digital platforms, after warnings from Brussels that the Elon Musk-owned platform is unprepared for the new rules.

The company, which Musk bought in October 2022, has been designated a “very large online platform” under the bloc’s Digital Services Act, which means complying with measures such as publishing an independent audit of its compliance with the legislation.

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Major tech firms face hefty fines under new digital consumer bill

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Global companies like Google, Apple and Amazon could have to pay penalties of up to 10% of their global turnover as government gives competition watchdog more power

Major tech firms face the threat of multibillion-pound fines for breaching consumer protection rules under new legislation that will tackle issues including fake online reviews and subscriptions that are difficult to cancel.

The digital markets, competition and consumers bill will empower the UK’s competition watchdog to tackle the “excessive dominance” that a small number of tech firms hold over consumers and businesses.

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EY plan to break up consultancy and audit divisions blocked by US office

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Accountancy firm confirms work has stopped on radical scheme after internal concerns about structure

EY has scrapped plans for a radical breakup of its global operations after internal disputes over the potential structure of the new businesses.

The company started laying the groundwork for separating its audit and advisory businesses – under the codename Project Everest – last year, as the big four accounting firms faced mounting criticism about conflicts of interest between the two divisions.

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CMA to investigate Amazon’s $1.7bn takeover of Roomba firm

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Competition watchdog calls for evidence deal could give online retailer dominance in smart home market

Amazon’s $1.7bn takeover of the owner of the Roomba robotic vacuum cleaner is being examined by the UK’s competition watchdog.

The Competition and Markets Authority (CMA) has called for evidence on whether the deal could lead to “a substantial lessening of competition within any market or markets in the United Kingdom for goods or services” and so would require a full investigation.

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Watchdog to block shareholder payouts if UK water companies miss targets

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Ofwat says new powers will be used if firms fail to reach performance and environmental goals

The UK water regulator is to use new powers to block companies from shareholder payouts if they fail to hit performance and environmental targets.

Ofwat, which in December heavily criticised some of the country’s biggest suppliers over the size of dividend payments relative to their financial performance, said the new rules would also mean water companies would “maintain a higher level of overall financial health”.

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Ladbrokes fined nearly $80,000 for failing to stem damage from man who stole millions for gambling

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Regulator finds firm did not inquire as to source of Gavin Fineff’s funds and instead ‘provided attractive bonuses’

The sports wagering company Ladbrokes has been fined nearly $80,000 for serious breaches of its licence and failing to limit damage caused by Gavin Fineff, a financial adviser who stole millions of dollars from his clients to service his gambling addiction.

Fineff has pleaded guilty to multiple fraud-related offences in the New South Wales district court and is awaiting sentencing. He lost more than $8m to sports gambling, with much of that money belonging to friends and clients, some of them elderly and vulnerable.

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‘Greenwashing’ firms face steep new UK fines for misleading claims

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Legislation could see companies fined millions of pounds for making unproven environmental assertions to sell their products

When the hydrogen-powered Hyundai Nexo car was launched in the UK in the spring of 2019, it was described as “so beautifully clean” that it “purifies the air as it goes”.

Hyundai Motor UK claimed that if 10,000 of its cars were on the road, carbon emission reduction would be “equivalent to planting 60,000 trees”.

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Sub-prime lender Amigo avoids £73m fine after claiming hardship

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FCA finds company put customers at high risk of harm by failing to assess whether they could repay loans

The sub-prime lender Amigo has dodged a £73m fine despite having put consumers at a “high risk” of harm, amid fears that the financial penalty could have led to its collapse.

The Financial Conduct Authority (FCA) investigation found Amigo put business interests ahead of its customers, by failing to properly assess whether customers, or their guarantors, could afford to repay loans they applied for – noting faults in both its automated tech and human oversight between November 2018 and March 2020.

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Sunak rejects calls for BBC chair, Richard Sharp, to stand down

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PM says he does not want to prejudge inquiry and that appointment was made after the ‘correct process’

Rishi Sunak has rejected calls for Richard Sharp to stand down as BBC chairman, despite the businessman failing to declare his role in arranging a secret £800,000 personal loan for Boris Johnson.

Sharp has been criticised by MPs for “significant errors of judgement” over his failure to mention his role in helping to arrange the loan for the former prime minister in early 2020. Johnson later appointed Sharp, a Conservative party donor, to oversee the BBC’s board.

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Scams: FCA blocks more than 10,000 ads from Instagram, Facebook and YouTube

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Financial watchdog warns over rise of ‘fin-fluencers’ targeting younger people on social media

More than 10,000 misleading financial promotions and scams aimed at consumers via social media sites such as Instagram, Facebook, YouTube and TikTok have been identified and targeted by the financial watchdog during the past year.

The Financial Conduct Authority (FCA) said the use of social media marketing channels and the rise of so-called “fin-fluencers” – particularly directing investment products at younger age groups – exploded last year, resulting in a record number of takedown notices and alerts.

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UK charities watchdog ‘assesses concerns’ about Campaign Against Antisemitism

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Commission opens ‘regulatory compliance case’ after complaints that the charity is politically partisan

The Charity Commission has said it is “assessing concerns” about the Campaign Against Antisemitism, which was at the forefront of antisemitism allegations against Labour under Jeremy Corbyn’s leadership.

The commission has opened a regulatory compliance case against the CAA, after complaints including that the charity is politically partisan.

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FTX assets worth $3.5bn held by Bahamas securities regulator

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Authority says it is holding digital assets until they can be returned to creditors and former customers

The Bahamas securities regulator has said it has seized assets worth $3.5bn (£2.9bn) from the failed cryptocurrency exchange FTX and plans to return them to creditors and former customers.

The Securities Commission of the Bahamas said it had transferred all digital assets under the custody or control of FTX Digital Markets, a Bahamas subsidiary of the FTX operation, to its own digital wallets for “safekeeping”.

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Jeremy Hunt to outline plans for shake-up of City regulation

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Chancellor expected to target senior managers’ regime and ringfencing rules in 30-point package

Jeremy Hunt is due to unveil a 30-point package of City policy changes on Friday that will involve rowing back on regulations in order to boost competition and growth.

The chancellor’s announcement, referred to as the “Edinburgh reforms”, will outline how the government intends to “review, repeal and replace” a host of rules that were introduced to protect savers and the taxpayer after the 2008 financial crisis, but which ministers now believe risk hindering the success of London’s banks and insurers compared with their overseas peers.

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