Legal & General director of compliance Diana Miller has attacked the FSA for failing to grill any intermediaries during an investigation into endowment misselling.
Miller told a financial services and markets tribunal that the regulator had no und-erstanding of L&G's sales processes because it had failed to speak to any advisers.
L&G is appealing against a £1.1m fine for selling mortgage endowments to unsuitable people between 1997 and 1999.
The FSA has argued that it acted fairly and properly during its investigation and that L&G were deflecting the issue away from its own role and on to the regulator.
In a 75-page statement that Miller presented over three days, she outlined how appointed representatives were closely monitored and how they had to pass rigorous checks.
Miller argues that during a number of visits to L&G's offices by regulators, there was never any indication that there were problems with sales processes.
Miller argued that the FSA could never have known what was happening at the point of sale.
She claimed that when faults were notified to L&G they were scrutinised in detail by the company, which ironed out flaws in the system at the request of regulators on a number of occasions.
She accused the FSA of refusing to address or debate what L&G saw as fundamental flaws in its investigation, Miller said: “Consequently, I feel strongly that the enforcement division of the FSA gathered no understanding of the actual sales process through which to gauge whe-ther or not there were systematic failings.
“The so-called flaws which they felt they had identified were therefore never put into context through discussion with the people who actually sell the products.”
The tribunal continues.