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FSA increasing focus on criminal prosecutions

FSA director of enforcement Margaret Cole told delegates at the FSA Financial Enforcement Conference in London today that enforcement activity is at the forefront of its drive to achieve credible deterrence.

The FSA is focusing on enforcement action, and especially criminal prosecutions, to deter organisations and individuals from non-compliant behaviour.

She said: “We have to be ready, willing and able to do enough cases of the right sort to get the right outcomes, to get the message out to firms and individuals that they will suffer meaningful consequences if they fail to raise their game and improve standards of behaviour.”

Cole added that the FSA is increasing its focus on bringing criminal prosecutions against those who fail to comply with the rules.

She said: “I should make clear that our aim is to clean up the market, to change behaviour by making best use of all the powers – criminal, civil and administrative – that are available to us. If people have to go to prison for us to achieve that aim then that’s what we are prepared to do.”

Cole said the threat of civil fines has not worked well as a deterrent in the City and the regulator believes the threat of a custodial sentence is a more significant deterrent.

She said: “As I said when I appeared before the Select Committee, we intend to be bolder and more resolute about proceeding with market abuse and insider dealing cases so that we can actually bring about a change in the culture in the City.”

Cole said the FSA will also be offering incentives to lesser participants in criminal activity to co-operate in building evidence against others.

She said: “We may go for alternatives to criminal prosecution for those suspects who are prepared to come forward with evidence against other, more culpable, parties. By that I mean that we can provide incentives for providing evidence by taking regulatory, rather than criminal action in return for evidence. Depending on the facts we might also agree a lower penalty, but as a minimum we would expect a co-operating witness to be stripped of the profits of their wrongdoing.”


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