Super SIB looks to fines for City fraudsters

The UK regulatory regime is set for a radical shake up under the new Super SIB.

SIB, the Securities and Investments Board, has called for the introduction of civil penalties to hit various fraudsters and market manipulators in the pocket.

Traditionally regulation in the City veers between criminal proceedings and self regulation.

Although criminal sanctions are a heavy deterrent, successful prosecutions are difficult to pull off.

Self-regulation, on the other hand, has a tendency to degenerate into cozy give-and-take.

The introduction of civil penalties is seen as a third course midway between the two extremes.

High on the list of areas suitable for civil sanction is market manipulation."Manipulation damages markets because some market participants benefit unfairly at the expense of others," says Gary Sears, secretary of the Market Conduct Group at SIB.

Mr Sears also is interested in creating new laws carrying fines to stop other forms of financial abuse. These include market squeezes, where traders deliberately force up the price of a commodity by effectively cornering a market.

SIB is also concerned about the buying of shares to trigger bonus clauses in remuneration contracts. Likewise, trading to interfere with the price or settlement of derivative contracts is frowned upon.

NewRo, the super regulator which will incorporate SIB, the Securities and Futures Authority, and the Personal Investment Authority, has yet to make any statements about how it will proceed with regulation policy in the UK. However, the move by SIB will suggest that civil penalties - which are used on Wall Street, by the Securities and Exchanges Commission - will also come into operation in the UK.

There have been arguments over civil liberty issues against them. But it is generally believed that the use of civil penalties by SIB would bring a speedier, more efficient, and fairer means to dispense justice than the cumbersome court-based procedure that is used.

SIB is due to circulate a discussion document to generate debate among market participants and the public generally. The prospect of civil penalties would be welcomed by many market practitioners.

Colin Condren, head of compliance at BZW, supports the concept of civil penalties. "It seems that it works for the SEC, where you can settle without admitting liability," he said.

Another securities dealer said, "You never see the colourful characters, the big players in insider trading, being done under the current set up."

In a separate development, the proper new name of the Super SIB will be unveiled at a conference to be held a week this Tuesday.

The Chancellor, Gordon Brown will give a speech emphasising the importance of regulation to the consumer. Howard Davies, the former Deputy Governor of the Bank of England, who has been appointed head of the new giant regulator, will also give a speech. Three consultative papers will be issued, on consumer involvement, practitioner involvement, and funding for NewRo.

PROMOTED VIDEO
Life and Style
Out and about: for 'Glee' character Bert Hummel, having a gay son was a learning curve
lifeEven 'cool' parents need help parenting gay teens
Sport
Nathaniel Clyne celebrates after salvaging a point with the Southampton equaliser
footballAston Villa vs Southampton report
News
peopleJack Monroe accuses David Cameron of 'misty-eyed rhetoric'
News
Tana Ramsay gave evidence in a legal action in which her husband, Gordon, is accusing her father, Christopher Hutcheson, of using a ghost writer machine to “forge” his signature
peopleTana Ramsay said alleged discovery was 'extremely distressing'
Arts and Entertainment
Robin Windsor and Aljaz Skorjanec rehearse their same-sex dance together on Strictly Come Dancing
TV
News
ebooksNow available in paperback
Money
Anyone over the age of 40 seeking a loan with a standard term of 25 years will be borrowing beyond a normal retirement age of 65, and is liable to find their options restricted
propertyAnd it's even worse if you're 40
Arts and Entertainment
Perhaps longest awaited is the adaptation of Jack Kerouac’s On the Road with Brazil’s Walter Salles directing and Sam Riley, Kristen Stewart and Viggo Mortensen as the Beat-era outsiders
books
Arts and Entertainment
theatreSinger to join cast of his Broadway show after The Last Ship flounders at the box office
Life and Style
fashion'To start singing with Pharrell is not that bad, no?'
News
news
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Argyll Scott International: Risk Assurance Manager

Negotiable: Argyll Scott International: Hi All, I'm currently recruiting for t...

Argyll Scott International: Business Analyst - MGA - London Market - Insurance Broker

£50000 - £60000 per annum + benefits: Argyll Scott International: A Business A...

Ashdown Group: PR, Marketing & Events Executive - Southwark, London - £35,000

£30000 - £35000 per annum + benefits: Ashdown Group: PR Marketing & Events Exe...

Selby Jennings: C++ Developer – Hedge Fund – New York

$80000 - $110000 per annum, Benefits: Bonus and Employee Investment Scheme: Se...

Day In a Page

In a world of Saudi bullying, right-wing Israeli ministers and the twilight of Obama, Iran is looking like a possible policeman of the Gulf

Iran is shifting from pariah to possible future policeman of the Gulf

Robert Fisk on our crisis with Iran
The young are the new poor: A third of young people pushed into poverty

The young are the new poor

Sharp increase in the number of under-25s living in poverty
Greens on the march: ‘We could be on the edge of something very big’

Greens on the march

‘We could be on the edge of something very big’
Revealed: the case against Bill Cosby - through the stories of his accusers

Revealed: the case against Bill Cosby

Through the stories of his accusers
Why are words like 'mongol' and 'mongoloid' still bandied about as insults?

The Meaning of Mongol

Why are the words 'mongol' and 'mongoloid' still bandied about as insults?
Mau Mau uprising: Kenyans still waiting for justice join class action over Britain's role in the emergency

Kenyans still waiting for justice over Mau Mau uprising

Thousands join class action over Britain's role in the emergency
Isis in Iraq: The trauma of the last six months has overwhelmed the remaining Christians in the country

The last Christians in Iraq

After 2,000 years, a community will try anything – including pretending to convert to Islam – to avoid losing everything, says Patrick Cockburn
Black Friday: Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Britain braced for Black Friday
Bill Cosby's persona goes from America's dad to date-rape drugs

From America's dad to date-rape drugs

Stories of Bill Cosby's alleged sexual assaults may have circulated widely in Hollywood, but they came as a shock to fans, says Rupert Cornwell
Clare Balding: 'Women's sport is kicking off at last'

Clare Balding: 'Women's sport is kicking off at last'

As fans flock to see England women's Wembley debut against Germany, the TV presenter on an exciting 'sea change'
Oh come, all ye multi-faithful: The Christmas jumper is in fashion, but should you wear your religion on your sleeve?

Oh come, all ye multi-faithful

The Christmas jumper is in fashion, but should you wear your religion on your sleeve?
Dr Charles Heatley: The GP off to do battle in the war against Ebola

The GP off to do battle in the war against Ebola

Dr Charles Heatley on joining the NHS volunteers' team bound for Sierra Leone
Flogging vlogging: First video bloggers conquered YouTube. Now they want us to buy their books

Flogging vlogging

First video bloggers conquered YouTube. Now they want us to buy their books
Saturday Night Live vs The Daily Show: US channels wage comedy star wars

Saturday Night Live vs The Daily Show

US channels wage comedy star wars
When is a wine made in Piedmont not a Piemonte wine? When EU rules make Italian vineyards invisible

When is a wine made in Piedmont not a Piemonte wine?

When EU rules make Italian vineyards invisible