Starting this weekend, the Netherlands Authority for the Financial Markets (AFM) can impose fines of up to 8 million euros. The Dutch government hopes that increased penalties will act as a stronger deterrent for white-collar criminals.

The AFM supervises participants of all financial markets in the Netherlands, including financial service providers, stock brokers, bankers, insurance brokers, accountants and advisors. In the case of a violation of financial laws and regulations, the AFM is allowed to issue fines. Up till now, the maximum fine was 480,000 euros. From this Saturday, the AFM can issue a fine of 4 million euros for first time offenders and up to 8 million euros for repeat offenders. Additionally, managers and executives can now be personally fined.

On par with other countries
The new penalty system actually puts the AFM on par with similar organizations in other countries. The British Financial Services Authority has no official limit to the fines they can issue but often issue multi million fines as well. Recently, they fined HSBC to the tune of 3 million British pounds for information security failings. And in 2004, the United States Securities and Exchange Commission fined Wachovia Corp 37 million dollars for violating disclosure rules in connection with its merger with First Union Corp in 2001.

What do you think? Will the new heavier fines help prevent white-collar crime, or will the big hustlers continue to find ways to fill their pockets?