FSA To Target Bosses

Britain's bosses have been warned that they will become targets of future probes by the Financial Services Authority as the watchdog seeks to crack down on market abuse, The Telegraph reports. The FSA's director of enforcement, Margaret Cole, says the

By None

Britain’s bosses have been warned that they will become targets of future probes by the Financial Services Authority as the watchdog seeks to crack down on market abuse, The Telegraph reports.

The FSA’s director of enforcement, Margaret Cole, says the regulator would switch its focus from companies to individuals as it believed it would be a more effective deterrent against wrongdoing.

“You can expect to see more supervision and enforcement focus on individuals, especially significant influence function holders,” she says.

“We have made a strategic decision to investigate more individuals, so even though that could well mean that cases take longer, and quick public outcomes are delayed, we consider this a price worth paying to obtain credible deterrence.”

The FSA has increased its focus on market abuse in recent months, following an unprecedented slump in the shares of mortgage bank HBOS. It has more than doubled the size of its team of lawyers and investigators with criminal expertise and has announced plans to make more use of jail sentences, alongside civil fines.

The Government is also set to grant it additional powers, including the ability to grant immunity from prosecution in exchange for evidence to help track down “smoking guns”.

Until earlier this year, it had not brought a criminal case for insider dealing since it took over prosecutions in 2001. It has now brought three, and more are in the pipeline, Cole says.

She adds that the FSA would also look at sterner punishments. “If people have to go to prison for us to achieve that aim [of clean markets] then that is what we will do,” says Cole. “We intend to be bolder and more resolute in proceeding with market abuse and insider dealing cases so we can bring about a change in the culture of the City.”

Cole cites a study by consultants Deloitte for the Office of Fair Trading which found that going for individuals was a more successful deterrent than moves against firms.

«