We will remove your livelihood, FSA chief tells rogues

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The Independent Online

The Financial Services Authority's chief disciplinarian, Tim Herrington, issued a stark warning to financial fraudsters and rule breakers yesterday, saying he would not be afraid to "remove the livelihoods" of anyone who threatened the stability of UK markets.

In an interview with the news service Bloomberg, Mr Herrington, the head of the FSA's regulatory decisions committee said he would be increasing fines on individuals, claiming that several of the highest penalties ever levied were in the pipeline.

The FSA's highest fine levied on an individual is the £350,000 penalty handed to David Maslen, the former head of European cash trading at Deutsche Bank, for market abuse in April.

Paul "The Plumber" Davidson successfully appealed against a £750,000 fine for market abuse this year, while Philippe Jabre, the hedge fund manager, is appealing against a similar-sized penalty.

Mr Herrington said there was "no ceiling" on the amount he was prepared to fine individuals, adding that he was willing to take on on more criminal convictions for the most severe cases.

The FSA's enforcement process has come under firein recent years. Mr Herrington's predecessor, Christopher FitzGerald, was forced to quit his job two years ago after he was deemed to have compromised The Plumber's initial appeal, by talking to one of the judges on the tribunal after the hearing had started.

Last year, the insurer Legal & General halved a fine for mortgage endowment mis-selling when it challenged the regulator's decision in the tribunal. Although L&G was not completely exonerated, the FSA's enforcement procedures were criticised by the tribunal, sparking an overhaul of its system last year.

Mr Herrington said he was not perturbed by the number of appeals. "We won't be more lenient because we are worried about getting appealed. I don't judge my success in this role by how many people go to the tribunal," he said.

The FSA succeeded in its first criminal prosecutions last year, securing the convictions of the former finance director and chief executive of the software company AIT, for market abuse. The pair, Gareth Bailey and Carl Rigby, were originally sentenced to three and a half, and two years in jail respectively. On appeal, the sentences were reduced to nine months for Bailey and 18 months for Rigby.

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