FSA threatens action on investment banks The Financial Services Authority is threatening regulatory action against several investment banks after it discovered shortfalls in their anti-bribery controls. A review of the anti-bribery systems of 15 investment banks uncovered that most of them had not properly taken account of the rules covering bribery and corruption, said the FSA. "We are concerned that the investment banking sector has been too slow and reactive in managing bribery and corruption risk," it said. Nearly half the banks visited by the FSA did not have adequate risk assessment and management information on anti-bribery and corruption was "poor," the regulator added. The FSA said it was considering taking further action against some of the investment banks it had visited. Legal experts said it would be likely to single out one or two banks for fines in the same manner as it had done with insurance brokers after a similar review two years ago. The findings prompted the regulator to impose a £5.25m fine on insurance broker Aon and a £6.9m fine against rival Willis . Sam Carruthers, a director in the fraud investigation team at Ernst & Young said: "I would expect the FSA to come out with enforcement action later this year." Raj Parker, partner at Freshfields, added: "To come out with enforcement against a few to encourage all the others to act is traditionally the way the FSA proceeds." The FSA said its visits and the introduction of the UK Bribery Act two years ago had prompted banks to consider their anti-bribery systems. The findings come the same week as Coutts & Co, the private bank used by Queen Elizabeth II, was fined £8.8m by the FSA for not having enough controls to guard against money-laundering, another area where the regulator found that the majority of banks fell short in a thematic review and subsequently took enforcement action. The FSA announced its review into investment banks" anti-bribery controls after the Arab spring last year, as the Bribery Act took effect - the largest overhaul of Britain's graft laws in a century. The legislation gave the Serious Fraud Office, the lead prosecutor and enforcer of the act, powers to take action against an individual or company with a link to the UK, no matter where the alleged bribery took place or where the company is based. Companies face an unlimited fine and individuals may receive a prison sentence of up to 10 years for breaches of the law. This means that banks and other financial companies regulated by the FSA are facing scrutiny on two fronts, from both the FSA and the SFO. The SFO has said it will share information with the FSA on regulated companies. In practice, the FSA need only show that a company did not have tight enough controls against bribery to impose a fine, rather than prove any wrongdoing took place.