Anonymity in FCA Investigations Following CIT (an anonymised company) v Financial Conduct Authority (No.1) [2025] EWHC 2614 (Admin)

The High Court has decided the first case on the FCA’s ability to name persons under investigation. This provides a useful opportunity to review the relevant guidance in light of the new authority. ‘Part 2’ of the decision has not been handed down, pending any decision to appeal by the claimant.

In summary:

1. In most cases, the identity of persons subject to FCA investigations will only be made public in ‘exceptional circumstances’;
2. Exceptionality is to be assessed by reference to other investigations, not ‘regulated situations’, in other words it must be an exceptional investigation;
3. The desirability of such an announcement must be assessed by reference to five regulatory objectives set out in the Enforcement Guide at 4.1.4;
4. The FCA must weigh the prejudice of such an announcement against the benefits of publicity; and
5. The FCA must weigh the merits of such an announcement against the alternatives, specifically, making an anonymised announcement, or no announcement at all.

The Guidance

Section 4.1 of the Enforcement Guide deals with ‘Publicity during FCA investigations’. It contains nine provisions, which can be summarised as follows:

4.1.1 and 4.1.2 – The FCA will not normally make public the fact that it is or is not investigating a particular matter, or any of the findings or conclusions of an investigation. The principal test is the ‘exceptional circumstances test’.

4.1.3 – In the context of a takeover bid, the FCA may make an announcement that it is not investigating where (in summary) it has no plans to investigate and considers that such an announcement would prevent/eliminate public uncertainty.

4.1.4  – in ‘exceptional circumstances’ the FCA will make an investigation public if it considered such an announcement is “desirable to” achieve one of the five regulatory objectives:

1. 1. “maintain public confidence in the UK financial system or the market;
   2. protect consumers or investors;
   3. prevent widespread malpractice;
   4. help the investigation itself, for example by bringing forward witnesses; or
   5. maintain the smooth operation of the market.”

Further: “In deciding whether to make an announcement, the FCA will consider the potential prejudice that it believes may be caused to any persons who are, or who are likely to be, a subject of the investigation.”

4.1.5 – By way of example, exceptional circumstances may arise where the matters under investigation have been the subject of public speculation.

4.1.6 and 4.1.7 – There are limited other scenarios where announcements may be made. Specifically, where the investigation is into unauthorised activity or criminality relating to unregulated activity (if this arises, refer to the Guide as there is more to this element), or when the subject of the investigation has already made the matter public.

4.1.8 – The FCA may make an announcement without identifying the subject of the investigation “where it is desirable for the purpose of educating persons generally as to the types of conduct that the FCA is investigating or to encourage compliance with the FCA’s rules or other requirements.”

4.1.9 – The FCA will not normally publish the findings of an investigation, but it may do so in limited circumstances where not prevented by FSMA.

Fordham J usefully summarised the above at paragraph 20 of the decision (formatting added:

“All of this means the FCA has three essential options.

The first is “No Announcement”, reflected in the paragraph [1] baseline position, where the “fact” of the investigation is not made “public”.

The second is an Anonymised Announcement, reflected in paragraph [8], which speaks of announcement “without naming … the subject of the investigation”.

The third is the Naming Announcement, where the subject of the investigation is identified.”

When will an investigation be publicised?

Fordham J went on to deal with some propositions relating to how this exceptionality analysis should be undertaken. Several propositions were accepted by the court:

• The court will assess the meaning of the Guide on a ‘correctness basis’ and seek to establish the ‘objectively correct’ meaning. On a question of the application of that meaning, the court remains limited to assessing the reasonableness of the actions and decisions of the FCA.[1]
• An investigation is not exceptional because the relevant alleged conduct is so serious that it warrants investigation. Exceptionality is “relative to investigated-situations” not “relative to regulated-situations“.[2]
• The desirability of a naming announcement is to be assessed relative to the desirability of the available alternatives, namely an anonymised announcement and no announcement. Further and relatedly, the exceptional circumstances must relate to the reasons relevant to naming the investigated person, not just reasons relevant to announcing the mere fact of an investigation.[3]
• The reasoning of the case team within the FCA was looked at “as a whole”, individual weaknesses in reasoning were not enough to render the decision itself unreasonable.[4] It is difficult to assess Fordham J’s conclusion on this, as none of the facts underpinning the FCA’s decision are included in ‘Part 1’ of his judgement. For presumably the same reason, this decision does not yet provide any guidance on the meaning of the relevant regulatory objectives.

Significance for practitioners and investigated parties

This decision demonstrates that the FCA is able to use publicity to protect consumers and is clearly willing to do so.

It is notable that the claimant was only given 24 hours’ notice of the proposed publication. It does not appear that this element of the procedure was challenged by the claimant or criticised by the court. Regulated persons and their legal advisors need to be prepared to act very quickly in response to a proposed announcement, and ought to consider the appropriate response to an announcement at an early stage in any investigation, ideally considerably before being put on notice.

If a person wishes to challenge a decision by the FCA to announce an investigation, judicial review is their only avenue. The investigated firm in this matter was ordered to pay £32,000 in costs to the FCA. It is difficult to assess the significance of that order. For a major financial institution the possibility of preventing publication may be worth the litigation risk when balanced against the reputational consequences arising from an announcement.

While the costs consequences may be manageable, this decision affirms the courts’ limited role in assessing the decisions of the FCA. Successfully challenging an announcement decision will not be easy. Further, predicting one’s chances of success will be a difficult exercise, as it is difficult to assess how reasonable a given decision is ‘from the outside’.

The Guide also specifies that exceptional circumstances may arise where there is already public speculation about an investigation. In such circumstances, litigating to prevent an announcement may be actively harmful, as public speculation may roam further than the actual boundaries of an investigation.

In cases where the investigated person is likely to cooperate fully with the FCA[5], litigating an announcement is likely to be, at best, a waste of time and money, and arguably counterproductive.

Conclusion

The ‘exceptional circumstances’ test for publication is relatively new, and it is not yet clear how regularly the FCA will deem one of their investigations exceptional.  It may be advisable to challenge a decision by the FCA to publicise an investigation where:

1. The investigated person plans to robustly contest the allegations, and there is at least a reasonable chance of success; and
2. The FCA has either plainly misunderstood the Guide, or has made a profound error in their decision making such that the decision when viewed ‘as a whole’ is unsustainable.

[1] Paragraphs 22 and 23

[2] Paragraph 25

[3] Paragraph 26

[4] Paragraph 38

[5] See https://www.2harecourt.com/2025/04/03/discounts-for-cooperation-in-financial-services-regulation/