Last week Martin Wheatley was announced as the CEO-designate of the Consumer Protection and Markets Authority.
In a consultation paper last summer, the Government suggested the CPMA would be a consumer champion, though the day after Wheatley’s appointment the Treasury select committee called on the Treasury to drop the label.
Wheatley has extensive experience of stock market regulation through his five years as head of the Hong Kong Securities and Futures Commission, a period as deputy chief executive of the London Stock Exchange and a stint on the FSA’s listings advisory committee.
He has overseen more than 170 prosecutions for market manipulation in three years in Hong Kong. His record on pleasing consumers is however a little more patchy.
When Lehman Brothers collapsed in 2008, hundreds of protesters gathered outside the regulator’s office in Hong Kong, some reportedly burned pictures of Wheatley.
Local investors were angry after being sold products called constellation notes by local banks as safe products which turned out to be riskier than banks apparently let on. Although this CNN footage seems to show warnings about the risk of losing everything were not exactly hidden away.
They might as well have wished upon a star. The constellation notes turned out to be linked to Lehman mini-bonds and many people lost their savings.
Although the bank did not admit liability (do they ever?) the regulator reached an agreement with the bank to pay out more than £50m in compensation, though there was no thank you party for Wheatley.
He has been reported as saying it is not the job of a regulator to determine whether a particular product is suitable for the whole of the retail market and to do so would probably end up in no products being approved. Interesting comments considering the FSA’s current work on product intervention.
Facts and Figures managing director Simon Webster says he hopes Wheatley has changed his mind by the time he joins the FSA in September before the CPMA begins to operate.
He says: “That is the FSA position, to be retrospective. You go off and do it and then we will tell you you are wrong and fine you, rather than being proactive. It is exactly the opposite of what we need.”