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Tory peer tables FS Bill amendment to stop ‘lynch mob justice’

Howard Flight Conservatives

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.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Howard – lynch mob justice indeed – and we thought the FSA was bad enough…

  2. “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.”

    If the government is setting the FCA’s agenda and defining its powers, this surely confirms that the FCA will be no more independent of government than the FSA? Yet still we’re likely to have to endure the same old lie about independence. The FCA, like the FSA before it, looks set to be just another instrument of government, a puppet of the Treasury, funded by the private sector and accountable only to its own board which, as we all know, means accountable to nobody. Despite heavy criticism from all quarters, has the FSA modified its behaviour in any way or is it just ploughing doggedly ahead with all the same agendas regardless?

    “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.”

    Okay, he’s entitled to his opinion, but is there the slightest prospect that this opinion might in any way be open to moderation in light of the numerous objections already being raised from many quarters of the FS community? Or is it a deal already done, as seems to be the case with so many issues on which the regulator claims to consult? Is this not one of the major failings of the current regulatory system and, if it is, then should it not be on the list of the FSA’s failings that Martin Wheatley has undertaken to address? Or will the FCA grant itself the unchallengeable right of determination as to what actually constitutes a failing and conveniently declare those that it doesn’t wish to address not actually to be failings as such and therefore exempt from any obligation to tackle them?

    Is not one of the biggest failings of the FSA the fact that, in the eyes of many, the regulator deals from a rigged deck and holds all the cards as well? If there’s no intention to redress the manifest imbalance of power between the regulator and the regulated, then it’s very hard to see any prospect of things changing for the better, regardless of anything Mr Wheatley might have to say. They may even continue to worsen.

  3. So why is Howard Flight running with this one and not Aifa’s very own man in the Lords, John Gummer? What they heck are they paying him to do?

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