In a landmark ruling on 23 October 2025, the High Court dismissed the first judicial review challenge to the Financial Conduct Authority’s (FCA) discretion to publicly announce investigations, including naming firms under investigation. The case, CIT v Financial Conduct Authority (No. 1) [2025] EWHC 2614 (Admin), offers significant insights into how the FCA applies its “exceptional circumstances” test when deciding whether to name a firm under investigation.
In short, the High Court’s ruling in CIT v FCA confirms that the FCA has significant discretion when it comes to naming firms under investigation, particularly when consumer protection is at stake. While the FCA’s decision-making process was upheld, businesses should be prepared for the potential reputational risks associated with being named in an FCA investigation. The decision is being appealed and the name of the firm has been withheld pending appeal.
Background: FCA’s “exceptional circumstances” test
The FCA, under Section 168 of the Financial Services and Markets Act 2000 (FSMA), has the power to launch investigations into firms, but its ability to disclose details about these investigations to the public is tightly controlled. The FCA’s Enforcement Guide sets out the rules for when and how the FCA can publicise an investigation, including the circumstances under which a firm may be named publicly. According to the Guide, the FCA typically does not name firms unless “exceptional circumstances” exist.
These exceptional circumstances include situations where a public announcement is necessary to:
- Maintain public confidence in the financial system
- Protect consumers or investors
- Prevent widespread malpractice
- Assist the FCA’s investigation by encouraging witnesses to come forward
- Maintain the smooth operation of the market
The test for naming is stringent, with the FCA previously being very selective about when it invokes this power. However, the ruling in this case signals a potential shift in how the FCA could approach naming investigations moving forward.
The case: CIT’s challenge
In this case, the FCA initiated a formal investigation into a firm (anonymised as CIT) in 2025. Initially, the FCA’s case team recommended issuing an anonymised announcement about the investigation, citing reputational concerns and the early stage of the investigation. However, senior stakeholders within the FCA overruled this suggestion, instead opting to publicly name CIT in the announcement.
The rationale for naming the firm was rooted in consumer protection and market confidence. The FCA argued that it was crucial for CIT’s customers to be informed about the investigation, as the firm’s failure to disclose the information directly could lead to confusion or potentially harm consumers. By naming the firm, the FCA believed it could more effectively protect consumers and provide transparency.
CIT objected, arguing that the FCA had misinterpreted its own rules regarding naming firms and that doing so would cause significant reputational harm. CIT sought judicial review of the FCA’s decision, prompting the court to examine the FCA’s interpretation and application of the exceptional circumstances test.
High Court ruling: FCA’s decision upheld
The High Court ruled in favour of the FCA, dismissing CIT’s judicial review challenge. The court found that there was no material misinterpretation of the FCA’s Enforcement Guide and that the FCA’s decision to name the firm fell within the range of reasonable regulatory decisions. The court acknowledged that while aspects of the FCA’s reasoning could have been clearer, the overall decision was justified based on consumer protection grounds.
One of the most important elements of the court’s ruling was its focus on consumer protection. The FCA argued that an anonymised announcement would not effectively inform CIT’s customers about the investigation, leaving them in the dark regarding the potential risks to their interests. A public naming, on the other hand, was seen as the most effective way to achieve this. The court however issued the judgment in two separate parts. The first was aimed at being published immediately, so it protects CIT’s anonymity and is also aimed at not prejudicing any appeal. Part 2 has been held back pending an appeal.
What this means for businesses
The High Court’s decision sets a precedent for future FCA investigations and public announcements. Here’s what businesses need to know:
Heightened transparency and reputational risk
The ruling reinforces that when the FCA decides to name a firm under investigation, the firm will face immediate public visibility. Firms named in such investigations will be subject to scrutiny from consumers, investors, competitors, and the media. This could lead to reputational damage early in the process, even if the firm has not yet been found guilty of any wrongdoing. The risk of being “named and shamed” can be significant, particularly for firms that rely heavily on consumer trust.
Importance of consumer protection in FCA decision-making
The FCA’s decision to name CIT was driven by the need to protect consumers and ensure that the firm’s customers were informed about the investigation. Businesses should be aware that the FCA may use its naming power in cases where consumer protection is at stake, even if the investigation is still in its early stages. This highlights the importance of maintaining robust consumer communication strategies, particularly when regulatory investigations are ongoing.
Short notice period for naming announcements
In this case, CIT was given only 24 hours’ notice before the FCA planned to name it publicly. Although the FCA had previously proposed giving firms a longer notice period (up to ten business days), this case underscores that the FCA may move quickly when it decides to publicise an investigation. Firms should be prepared for the possibility of very short notice and should have crisis communication plans in place to handle such situations swiftly.
Prepare for potential publicity
Even if the FCA does not initially name a firm, it may decide to do so later as the investigation progresses. Firms should have proactive crisis management plans in place, including pre-prepared public statements and communication strategies. Early engagement with the FCA can help manage the potential for naming and mitigate reputational damage.
Firms should engage early with the FCA
It is crucial for firms to engage early with the FCA if they are notified of an investigation. This engagement can help manage the narrative and clarify whether the FCA intends to make a public announcement. By addressing the publicity question early, firms can better prepare for the regulatory process and potentially challenge any proposed naming announcements if they believe they are unjustified.
Implications for future enforcement actions
This case marks the first detailed judicial analysis of the FCA’s naming powers since the update to its Enforcement Guide in June 2025. The ruling provides the FCA with a strong legal basis for naming firms under investigation when exceptional circumstances exist, particularly in cases where consumer protection is a key concern.
While the decision affirms the FCA’s authority, it also highlights the potential risks for firms subject to regulatory investigations. Businesses should take proactive steps to prepare for the possibility of public announcements, ensure that their communication plans are up to date, and engage early with the FCA to manage reputational risks.
As the FCA continues to adopt a more flexible approach to publicising investigations, firms must stay alert to the evolving landscape of regulatory enforcement and ensure they are prepared for the reputational challenges that may arise in the wake of such investigations.
