The number of dawn raids undertaken by the Financial Conduct Authority (FCA) has reached its lowest level since before the financial crisis.
Just seven dawn raids were carried out last year – 81 per cent fewer than in 2009, at the height of the financial crisis, according to analysis carried out by City law firm RPC.
But rather than putting this down to weakening enforcement, RPC has attributed the falling figures to a wind-down in the number of financial crimes being committed.
“The FCA knows that if it is seen as not being proactive enough in the area of financial crime, then it will come under tremendous pressure from politicians,” said RPC partner Richard Burger.
“Undertaking raids sends a clear deterrent message to the City of London and to the boiler room operators. If the FCA can make a good case for a raid then the FCA will do it.”
Dawn raids, carried out under warrant and in the presence of a police officer, are designed to capture as much potential evidence as possible from the premises of businesses and individuals suspected of wrongdoing.
While there has been a reduction in the number of major investigations, according to Burger, such as into Libor or forex rigging, there are still several criminal investigations active in areas such as insider dealing.
One long-awaited insider trading legal battle, which had been preceded by a series of dawn raids in 2010 masterminded by the now-defunct Financial Services Authority (FSA), began last year.
Nicknamed Operation Tabernula, it resulted in the sentencing of five former finance professionals including Martyn Dodgson, Andrew Hind, Graeme Shelley, Paul Milsom and Julian Rifa
The falling number of dawn raids follows earlier RPC findings that fines levied by the FCA have also dropped, from an aggregate of £905m in 2015 to just £22m last year.
“Some commentators are reading too much into the 97 per cent drop in FCA fines last year, but the FCA has not gone soft on proactive enforcement action,” said Burger.