FSA chief warns on insider dealing
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FSA chief executive Hector Sants has warned that the shake-up of financial regulation must not undermine the UK’s tougher approach on insider dealing and mistreating of customers.
Speaking at the FSA conference on enforcement yesterday Sants said that the new system announced by Chancellor George Osborne would only work if “supervisors and enforcers remain closely linked and can work seamlessly together”.
Osborne announced plans last week to break up the FSA and divide its responsibilities between the Bank of England and a new Consumer Protection and Markets Authority.
According to reports, Sants said: “We must not return to an era where supervisors are reluctant to engage with the enforcement process.”
Sants will become a deputy bank governor in charge of a new prudential subsidiary which will have oversight for banks and insurers. The majority of the FSA’s enforcers are expected to join the CPMA, however the government is also setting up a serious economic crime agency. It is expected that the new agency will handle the likes of insider dealing as well as other frauds, however the FSA is lobbying to retain its powers in this area.
FSA enforcement director Margaret Cole said: “We have established a strong track record as a ’heavyweight criminal prosecutor’ in the area of our specialist remit - insider dealing - in support of our objective of market cleanliness, and we have momentum and a strong pipeline of cases. We must build on the progress not lose it.”
Cole said it was important to retain the criminal, regulatory or civil routes for investigations. However, she did praise the proposal create a super agency to tackle “criminals in suits”.
“Visible strong policing and prosecution of economic crime serves to deter others so that we see a reduction fo fraud and of the harm it causes in our society and to the strength of our economy,” she added.
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