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Davies suggests FSA could name firms under investigation

The FSA is planning to name companies it is investigating as a means of reminding consumers of caveat emptor, according to outgoing chairman Sir Howard Davies.

In an interview with a national newspaper, Davies, who is leaving the regulator in September, said the FSA will change its policy in the autumn as to what it can reveal about ongoing investigations.

But the suggestion that firms may be publicly named before they have been found to have done anything wrong has been met with indignation by IFAs, who question whether such a move would not be against English common law.

They say that while the FSA is right to make general statements about ongoing investigations, it should not name specific firms.

Despite Davies&#39s comments, the FSA is already attempting to distance itself, saying there would have to be full consultation, including conversations with its lawyers, before any policy change was pursued.

Davies said: “We have concluded that we ought to relax this policy to some degree and, in order to do that, we need to consult. It might be the best way of alerting people to caveat emptor.”

Informed Choice managing director and Sofa chairman Nick Bamford says: “Isn&#39t that against English law? Didn&#39t we used to have a principle of innocent until proven guilty? This is a completely outrageous suggestion.”

The FSA has also said that it plans to invoke its powers of arrest to detain those suspected of criminal market abuse. It has had the authority to arr-est individuals since it came into being in December 2001 but has never opted to use it before.

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