'Mega-fine' lined upby City watchdog

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The Independent Online

City miscreants are expected to face an onslaught from watchdogs over the next three months after figures showed that the Financial Services Authority has levied just £14.6m in fines over the first quarter of 2012.

If those figures were extrapolated for the whole year it would point to a total fine count of £58.4m for 2012, which is down sharply on last year's total of £66.1m. That was in itself a steep decline on the £89.1m of fines that were imposed in 2010.

However, The Independent has learnt that there could be at least one "mega-fine" in the next three months with a number of smaller penalties being lined up.

And the outgoing enforcer-in-chief, Margaret Cole, has warned the City to expect an increase in the level and frequency of fines for misdeeds, with more blockbuster penalties, as the watchdog transitions to the new Financial Conduct Authority. It will police markets and firms supplying products to consumers after the FSA is split into the FCA and the Prudential Regulation Authority, which will oversee the financial strength of banks and insurers as a subsidiary of the Bank of England.

Regulators have also pointed to an increased focus on criminaltrials of people charged with market abuse and other offences.

With one trial currently ongoing and two set to kick off on 16 April, the FSA could be running threetrials at the same time at Southwark Crown Court.

The watchdog has been keen to shed its image as a relatively soft touch when compared with America's Securities & Exchange Commission, which polices markets in the US. Its tough stance often leads to miscreants led away in manacles.

Meanwhile a leaked email from Prudential has labelled the FSA's policies as "ludicrous" and horrendous" and said some regulations are "ill-judged".

The email from a Prudential executive was revealed as the FSA is overseeing an investigation into Prudential's failed £24bn bid for AIA.