More embarrassment for the regulators: comment

The DTI bags one or two insider dealers a year, and they seem more likely to get community service than a jail sentence. The Serious Fraud Office wins small cases but has a poor record on most of the big ones, including Maxwell.

Meanwhile, the great and the good are arguing for a switch to the use of civil law and regulatory penalties to deter wrongdoing of many kinds, from insider dealing to market manipulation. The theory is that the burden of proof is lower in civil and regulatory cases and this should raise the score rate. All very sensible in theory, but in practice it seems increasingly difficult to be confident that the civil penalties work any better.

The Securities and Futures Authority found to its embarrassment in the summer that the rulebooks were not tightly drawn enough to take any action at all against the people at the top of Barings - the chairman Peter Baring and his deputy Andrew Tuckey.

Now the SFA is faced with a succession of embarrassing defeats by the small fry of Barings, starting with Ron Baker, Nick Leeson's overall boss, who has successfully fought off an attempt to debar him from the City. This continued yesterday with confirmation of our report of a settlement with Mary Walz, Mr Baker's deputy. The remaining SFA cases against James Bax and Ian Hopkins, two other former Barings executives, look set to go the same way.

Having been unable to pin management responsibility where it is due - at the top - the SFA seems to have resorted to a scattergun approach lower down, but still without success. The best hope now is that it can push through its new rulebook, making it easier to bring charges against the very top management, and giving a real incentive to improve standards. As Nick Durlacher, chairman of the SFA, said last week "If the management structure is sound and managers are up to the job, then a fire started by a rogue will remain local and be quickly extinguished." Quite so.