Conservative peer Lord Howard Flight is tabling an amendment to the Financial Services Bill which would scrap the Financial Conduct Authority’s new powers to publish early warning notices about firms and individuals, claiming the powers would impose “lynch mob justice”.
Under Government proposals, the FCA will have the power to publish details of firms or individuals that are the subject of ongoing enforcement investigations without notifying them.
The bill will be debated in the House of Lords following the summer recess.
Flight says: “My objection to the proposal in the bill is that it will cause individuals and firms to be viewed as guilty once warning notices have been made public before they have the opportunity to defend themselves.
“Senior executives would have to resign. Share prices could be slashed, hurting pension savings, as we have seen with Standard Chartered. This is lynch mob justice.”
Labour peer Baroness Hayter says the party is unlikely to support the amendment as it is happy with this area of the bill, but will consider it when it is debated in the autumn.
It is understood FCA chief executive designate Martin Wheatley is keen to publish early warning notices about firms and individuals being investigated by the regulator.
Informed Choice managing director Martin Bamford says: “If the regulator is going to pick and choose when it publishes early warning notices then it is only right that firms get some notice so they can prepare their response.”