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Complaint watchdog slams FSA searches

The Complaints Commissioner says FSA enforcement staff have shown a lack of understanding of the procedures used when searching premises and called for additional training for those conducting searches.

In the Office of the Complaints Commissioner’s annual report for 2009/10, commissioner Anthony Holland says he identified “potential deficiencies in the training and or knowledge of the FSA’s enforcement staff” in relation to search procedures.

He calls for improved training to avoid complaints over breaches of human rights or challenges against evidence collected during searches.

The report says: “Particularly, this related to an understanding that the warrants issued to the FSA authorising a search of premises require a police presence throughout the duration of the search rather than just at the time when the warrant is served on the individual or the firm.

“The commissioner recommended all enforcement staff involved in the execution of searches should be aware of the detailed requirements set out by the warrant to ensure the searches remain legal and the FSA is not subject to complaints stating that there has been a breach of a complainant’s human rights.”

City law firm Reynolds Porter Chamberlain regulatory partner Jonathan Davies says: “If the FSA has used its powers incorrectly, it could face potential legal issues from the person being searched but the FSA has legal immunity unless it has acted in bad faith or has contravened the Human Rights Act. It could, however, result in the rejection of evidence it has collected.

“These concerns would be strong justification for the Government to carry out its proposals to take criminal prosecution powers from the FSA and merge them with the Serious Fraud Office to create a new white-collar crime agency.”

An FSA spokesman says the recommendation relates to one incident that occurred on April 10, 2008 when FSA investigators visited the home address of an authorised director and his wife, who was an employee of her husband’s firm.

The FSA had a warrant to search the home address, but the director told the enforcement staff that the information specified on the warrant was at a business centre.

Two FSA enforcement staff remained and searched the home, while two police officers and a number of FSA enforcement staff went to search the business centre premises.

The director of the firm complained that the FSA team had illegally executed the search warrant at his home address. The FSA upheld the complaint.

In a decision letter dated July 10, 2009, the FSA stated: “The FSA accepts that the FSA investigators who remained at the property and continued to execute the warrant, in the absence of the PC’s, acted unlawfully, it being a requirement that a constable should have been present throughout the search.”

Reviewing the case, the Complaints Commissioner wrote on March 19, 2010 and there is “no doubt” that the search carried out at the residential house was illegal and breached the complainants’ human rights.

He said: “The FSA acted illegally through its own failings in a number of areas which I identify as a failure to train its staff in this important area effectively as well as a failure to record and/or check important information that it possessed prior to obtaining a warrant as to the exact location of premises to be searched.”

An FSA spokesman says: “This was just one isolated case and the enforcement division has already amended its training in this area.”


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There are 18 comments at the moment, we would love to hear your opinion too.

  1. What a waste of police time.

  2. Pissed Off IFA 8th July 2010 at 9:08 am

    As I have said in previous comments FSA are just thugs and they have become so much worse since that woman Cole has arrived. I bet the FSA have a small man with a mistache adorning a number of thier rooms.

  3. Just wondering if IFAs can now use the defense ‘This was just one isolated case and training has been amended in this area’ when the FSA identifies issues with any advice………. meaning no further investigation needed – probably not……

  4. Would seem that current training was given by Inspector Clouseau.

  5. How dare they!!!!
    We are always in the right !
    We might not have any idea about what we are doing but we are paid “loads on money” so who cares?
    Any way we are always polite to our Banking friends….well you never know where the next job offer will come from

  6. Strange how it’s simply “an FSA spokesperson” that’s quoted when they made a mistake but when they are nailing a victim to the floor (for a one off mistake) Margeret Cole steps to the fore and prominently asserts her authority by demanding perfection from all concerned.
    Also if ,as it sounds, a case has collapsed due to invalid evidence then it’s not only police time that’s been wasted.

  7. I cant wait to get the bill for the extra training.
    I presume it will be residential training held in a 5 star hotel with no expense spared

  8. Oh shock – human rights being stamped on…maybe its about time we in the adviser market agreed that those doing wrong need kicked out of the industry. The receent fines by the FSA for mortgage fraud related activity show there are still plenty of bad apples in our barrel

  9. There are still some bad apples for sure but “Anonymous” misses the point. Regulation has moved into the realms of “shoot first”, he/ she may not have had the experience of being abused, wronged, even bankrupted in retirement by the FSA and it’s FOS buddy. This is an organisation that has very carefully placed itself above the law and we should all be afraid if this goes unchecked by the CPMA. Regulation should be fair and proportionate, in many cases it simply is not.

  10. Sounds as if the need their own RDR

  11. Even when they are not doing a raid, they behave as though they are. The FSA approach is guilty until we decide otherwise. Everybody they visit is a suspected criminal. FSA should stand for Financial Stasi Army.

  12. “I cant wait to get the bill for the extra training.
    I presume it will be residential training held in a 5 star hotel with no expense spared”…….

    I can’t wait either…not forgetting of course the bill for the coffee & biscuits!!

    All in the National Interest don’t you know!!.:)

  13. Does this really surprise me “no” The fsa is a law unto itself. It feels it has the power to overule the laws of this land. The important thing is who gave them the authority to circumvent the law?

  14. Agree with the posters who say the FSA is an organisation which has placed itself above the law. Even if one is guilty the law of the land states that we have a right to be presumed innocent until such times as the LAW finds otherwise. The fsa have things the other way round in that they presume we are guilty until WE can prove ourselves innocent. We should indeed be very afraid of an organisation who can operate outside of the rule of law. The CPMA must address this and other matters affecting advisers, such as the longstop. Until such times as these wrongs are put to right, the regulator and the government who by doing nothing condones this behaviour, deserves no more respect than any third world dictator.

  15. Historically an outlaw was someone outside the protection of English Law and law abiding citizens could do anything they like to outlaws (dead or alive).
    The question is, has the FSA removed us from the protection of the law or has it put itself outside the law?
    If they are immune from English common law, then I would suggest they don’t expect protection from it when or if they ignore an individuals rights under common law as if we have no rights under common law to pursue them within the law, then……..
    So to the FSA, perhaps with the swell of current adviser adn consumer feeling we should be repeating Hector’s words back to the FSA and it’s staff, i.e. “be afraid, be very afreaid” and adding you can only push an honest man/woman so far….

  16. Until very recently, the ‘soft touch’ regulation by the FSA under instruction from the last government, was considered to be a major factor in the credit crunch. I totally agree this was the case and the banks could get away with doing what they wanted, when they wanted and almost with the protection of the FSA.
    Now the FSA are finally doing what they should be doing and the banks don’t like it. Are we surprised?
    We cannot have it both ways – proper regulation of the financial sector is guaranteed to uncover some very unwholesome situations. If the banks don’t like it – tough. Let the FSA do their job. We were quick enough to criticise them when they didn’t – let’s not blame them when they do.

  17. Nikki Turner
    Are you unable to read?
    The FSA acknowledged they were wrong to do what thay did!
    Where is the bank mentioned in this report?
    This was the mans home for goodness sake.

  18. Spokesperson for the FSA 12th July 2010 at 3:51 pm

    To hell with procedures, proper or otherwise. We’re the FSA and we’re much too busy spending millions of pounds of other people’s money devising all sorts of procedures for OTHER people to follow. Haven’t you been keeping up with our 80 page quarterly bulletins?

    So come on, all you indignant folk out there ~ we’re the ‘Do as we say, not as we do’ regulator. Surely you’ve grasped that by now? Why d’you think we have a section of our vast yearly budget allocated to hatchets, sledgehammers and pickaxe handles?

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