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Publicity power for enforcement action criticised

Financial services lawyers have labelled the FSA “irresponsible” and “unaccountable” as it looks to toughen up new powers on publicising ongoing enforcement action.

The draft financial services bill, published in June, allows the Financial Conduct Authority to publicise warning notices against firms and individuals but requires the FCA to notify the subject of the warning notice beforehand.

The FSA has called for this requirement to be removed to avoid lengthy legal battles to stop information becoming public.

Pinsent Masons head of the financial services regulatory team Tim Dolan says: “If the FSA is sufficiently concerned about breaches to its rules, it can ask the regulatory decisions committee to urgently cancel the compan y’s regulated permissions.

“Why does it want to routinely publicise investigating firms? It seems to me the harm outweighs the good.”

Beachcroft partner Matthew Rutter says: “This is very worrying. There is no real recognition of the need to strike a balance between effective regulatory powers and the rights of those who are regulated.

“It is not a particularly sensible or responsible way for the FSA to regulate.”

4 Pump Court barrister Peter Hamilton says: “Firms will have no redress against the FCA if it gets the matter wrong. Further, the FCA will not be subject to adequate oversight and accountability in relation to the exercise of this power.”

Hamilton believes that the regulator should be liable for any damage it causes a firm’s business through publishing notices of investigations that are later dropped or the publication of inaccurate facts.

The FSA declined to comment.


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There are 2 comments at the moment, we would love to hear your opinion too.

  1. The FSA has finally confirmed that it is the new “GOD” of financial justice.

    It can never be “accountable” never “wrong” allways “right”

    Who do you “BELEIVE IN”


  2. If the FSA and it’s Directors are unaccountable for their errors and they want the rules changed so that before a notice is issued, the firm has an opportunity to ask the FSA to amend the use of words to be fairer and balanced and/or to enable the firm to prepare their side of a one sided argument for public consumption BEFORE publication, how is this morally fair?
    If the FSA are proved to have been wrong AFTER publication and there is no redress, is that justice?
    No it is NOT and with no justice, you bring the law in to contempt and in a civilised society, if you put someone outwith the law, how can you expect their responses to a lack of justice to be within the law?
    Personally if they did this to me and it was proven they were wrong and I had NO right of recourse, but had lost everything due to the FSAs errors, then I would look to use every fair means and FOUL to do the same to those responsible.
    If I had recourse to the law, I would accept I was wrong if the cort decided that, but if I have no rights under the law, what use is the law?

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