Recipient firms but also comparable peer firms exhibit asizeable negative capital market reaction to UnitedKingdom's regulatory enforcement actions. This result isinvariant to the identification of peer firms as belongingto the same industry classification or as having com-parable propensity scores to attract a sanction. Indis-criminate regulatory contagion, however, is ruled out.As per expectation, enforcement actions which piercethe‘corporate veil’, that is, target an individual within afirm, are related to no significant firm‐level market re-actions. These findings, in the financial sector, indicatethat sanctions are associated with a material spillovereffect consistent with informed regulatory contagion.