City firms rarely dock pay for misconduct, watchdog finds

City firms are only rarely docking pay and bonuses in cases of bad behaviour including sexual harassment, bullying and drug use, according to the industry's watchdog, which recorded a 40% rise in complaints about non-financial misconduct last year.

- Kalyeena Makortoff

The findings are the result of the City regulator's first survey looking at the issue, which was launched after high-profile allegations of sexual harassment including those against individuals at the Confederation of British Industry (CBI) lobby group.

The survey by the Financial Conduct Authority (FCA) - which covered 1,000 brokerages, corporate and investment banks, and insurance-related firms in the Lloyd's of London market - found complaints about non-financial misconduct had grown steadily in the three years to 2023. The organisations reported 1,363 incidents in 2021, 1,670 in 2022, and a jump in complaints to 2,347 in 2023.

The FCA said it was hard to determine whether staff misbehaviour was getting worse, or whether victims felt safer about speaking up.

It also said the upward trend was probably influenced by the Covid pandemic, given that staff had since steadily returned to the office after lockdowns and other restrictions.