High Court dismisses judicial review of the FCA’s decision to name firm under investigation

The High Court have dismissed a judicial review brought by an anonymised company, “CIT,” challenging the FCA’s “exceptional circumstances” test and decision to publicise its investigation and name CIT. In the judgment of 23 October 2025 in R. (CIT) v Financial Conduct Authority (No.1), Fordham J dismissed the substantive claim, holding that the FCA’s decision was both lawful and reasonable under the Enforcement Guide.  For now the name of the firm remains confidential pending the determination of the firm’s application for permission to appeal.

The decision comes at a time of heightened scrutiny of the FCA’s enforcement approach, following its recent, and ultimately abandoned, proposal to replace the “exceptional circumstances” test with a broader public interest test under Consultation Paper 24/2 (the ‘name and shame’ proposals). As a result, the judgment will be of great interest to firms and industry participants. For further information on the previous proposals and the FCA’s retreat, see our earlier articles here, here and here.

The ‘exceptional circumstances’ test

The Enforcement Guide states that the FCA will not normally publicise investigations, although it may issue an anonymised announcement. Naming a firm is only permitted in ‘exceptional circumstances’ if such an announcement is desirable to: (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. Any such decision must be balanced against the risk of potential prejudice to the subjects, or potential subjects, of the investigation.

The court articulated three key interpretive points, that will likely shape how future FCA decisions to name firms in announcements are assessed:

1. Exceptionality in the ‘exceptional circumstances’ test is measured against other investigated situations (such that it must be an exceptional investigation). Therefore, an argument that a matter is exceptional more generally, because it is so serious as to warrant investigation, will fail.
2. Desirability of making an announcement must be judged against both alternatives: to make no announcement; or to make an anonymised announcement.
3. The FCA’s reasoning as to exceptionality requires reasons relevant to naming, and not just reasons relevant to announcing.

As a result, the court considered that it would be an error of interpretation of the Enforcement Guide for the FCA to approach the ‘exceptional circumstances’ test by reference only to ‘no announcement’, or for reasons relevant only to announcement of the investigation rather than naming the subject.

Decision

Fordham J held that there was no material misdirection and that the decision, considered holistically, fell within the range of reasonable regulatory judgments. In terms of reasonableness, the court found the FCA reasonably concluded that:

• An anonymised announcement would not effectively inform CIT’s customers or enable them to consider their options. 
• A letter from CIT to its customers without disclosing that the FCA was investigating would be inadequate. 
• Naming CIT was the most effective means to achieve the Enforcement Guide’s objectives (particularly consumer protection) and outweighed the identified prejudice to CIT.

Fordham J suggested that there were aspects of the FCA’s reasoning in which they could be criticised. The key criticism cited is that the FCA case team did not adopt a ‘sequenced approach’, first dealing with the question of whether to make any announcement and subsequently with the question of whether this should be an anonymised or naming announcement.

Commentary

• Naming subjects of enforcement - Whilst the FCA’s default position is not to name firms, there remains a real risk of being named where the regulator can justify that it is necessary to achieve its statutory objectives. Firms should be prepared for the possibility of public identification at an early stage, even before any findings are made.
• ‘Exceptional circumstances’ test - The case marks the first challenge of the FCA’s “exceptional circumstances” test. Looking ahead, the court’s nuanced reading of ‘exceptional circumstances’ sets a high bar:  exceptionality and desirability must be shown for reasons relevant to naming, assessed against the option of an anonymised announcement rather than only the alternative of no announcement. This is likely to shape both the regulator’s internal decision-making and the approach of firms contemplating judicial review of such decisions.
• The importance of consumer protection– The court accepted that consumer protection may justify naming a subject of enforcement if an anonymised announcement would leave customers inadequately protected. This was ‘fatal’ to CIT’s reasonableness challenge, with Fordham J describing that “once the key theme [of consumer protection] is recognised, it is really the end of the case”.
• Anonymised announcements – All parties agreed that an anonymised announcement is a lawful option under the Enforcement Guide. As a result, the court have not provided any commentary in respect of the use of anonymised announcements. 
• Open justice and anonymity – The court held the majority of the hearing in private, granted anonymity orders and applied reporting restrictions, based on a a test of strict necessity and minimum derogation from the open justice principle. The court was clear that, in this case, publicity would defeat the proceedings.
• Judicial review of the FCA’s decisions - The judgment also serves as a reminder of the high bar for successfully challenging FCA decisions through judicial review. Whilst the court may be responsible for the correct interpretation of the Enforcement Guide and for determining any challenges of reasonableness, whether or not circumstances are ‘exceptional’ is a matter for the FCA as primary decision-maker.
• Notification period of a naming announcement – It is interesting to note that CIT were given only 24 hours’ notice of the proposed announcement. Earlier ‘name and shame’ proposals under CP24/2 had suggested a notice period of 10 business days. However, following the FCA’s retreat from those proposals, no specific notice period is currently required.

Next steps

Part 1 of the judgment is currently public. Part 2, which will contain further conclusions on the FCA decision-making and elements of the announcement, remains withheld pending any potential appeal. The forthcoming Part 2 of the judgment may provide further useful commentary.

Permission to appeal was not granted by the High Court. It is yet to be seen whether permission will be granted by the Court of Appeal; the FCA has undertaken not to make the announcement until permission to appeal is considered by the Court of Appeal.