Belfast Telegraph

Monday 22 December 2014

City offensive is too little too late for FSA

Slowly but surely, the Financial Services Authority is being stripped of its duties.

The latest update from the Government on the coalition's policy programme falls short of confirming that George Osborne will keep his pre-election pledge to abolish the regulator altogether.

But after the first deal between the Tories and the Lib Dems confirmed new macro-prudential powers for the Bank of England, yesterday's statement revealed that there is to be a single new agency launched to tackle economic crime.

Still, the FSA is not going down without a fight. The £2.8m fine it handed down to the ex-stockbroker Simon Eagle yesterday was three times the size of the largest penalty the regulator has previously levied on an individual. Though this case goes back six years, the size of the fine that Mr Eagle must pay is part of a pattern at the FSA, which has shown a newfound zest for cracking down on City wrongdoing.

Too little, too late? Well, City lawyers are genuinely full of praise for the FSA's attempts to up its game since the financial crisis, and single out the regulator's enforcement division, lead by the highly regarded Margaret Cole, as a force that is to be reckoned with.

Yet for all the good intentions and hard work, the results so far have been limited. On insider trading, the criminality the FSA really wants to tackle, it has secured only a handful of convictions. The most high-profile case, against the former Cazenove banker Malcolm Calvert, saw him jailed for 21 months, but the FSA faced criticism for failing to identify who in the City had fed him tips in the first place.

Similarly, although a series of dawn raids and arrests of suspects in insider dealing rings over the past couple of months have won the FSA some decent headlines, no charges have yet been brought.

These investigations take time, of course, but there is no guarantee they will ever bear fruit.

There is certainly no shortage of misbehaviour to go after. The regulator itself says almost a third of the takeover deals announced in 2008, the last year which it has studied, were preceded by suspicious share trading, a sharp rise on the past. In that context, the small handful of cases brought by the regulator looks woeful.

The truth is that this country has never properly tackled white-collar crime. The FSA had plenty of time to prove it was the agency to do so, but improvements of late notwithstanding, we have not seen enough good results.

Moreover, while the regulator has been working closely with bodies such as the Serious Organised Crime Agency, it must make sense to have a single authority in charge, both for the sake of operational efficiency and accountability. This is the right move.

COMMENT RULES: Comments that are judged to be defamatory, abusive or in bad taste are not acceptable and contributors who consistently fall below certain criteria will be permanently blacklisted. The moderator will not enter into debate with individual contributors and the moderator’s decision is final. It is Belfast Telegraph policy to close comments on court cases, tribunals and active legal investigations. We may also close comments on articles which are being targeted for abuse. Problems with commenting? customercare@belfasttelegraph.co.uk

Comment

More

Company Profiles

More

Help & Advice

More

People on the move

More