View from City Road: A pounds 10m fine, no criminal charges: it's a bargain

A swindler pleads guilty in front of a judge to a simple theft charge, in return for which half a dozen more serious counts of conspiracy are dropped. Instead of going to jail he pays a pounds 10m fine to the Securities and Investments Board and is disqualified from office for five years. The whole affair is cleared up in a year instead of waiting to grind through the criminal courts.

That is the prospect raised yesterday by the Royal Commission on Criminal Justice. As part of its plan for formal plea bargaining, the commission suggested regulatory penalties could be introduced to the courts.

The bargain could be struck in a number of ways: a criminal prosecution could be dropped in return for a regulatory penalty agreed in advance. Alternatively the defendant could plead guilty to a lesser charge in return for the regulatory penalties. The Serious Fraud Office and the SIB are currently discussing ways this could be done.

The commission suspects only a very small proportion of fraud cases would be suitable for regulatory penalties. But even if that is true the implications for City regulation are immense, because the commission says the regulatory penalties must be 'sufficiently severe that it could not be alleged that so-called white collar crime was being more leniently handled than other offences'.

That must mean fines and disqualifications that really hurt, not the modest penalties that bodies such as Imro have so far imposed. If regulatory plea bargaining is to be introduced, all the more reason for having a single City investigatory body, as the Stock Exchange has suggested.

Most significantly in the medium term, the commission has sided with George Staple, director of the SFO, in a turf war, by coming down in favour of an urgent study of a merger of the SFO with the Fraud Investigation Group of the Crown Prosecution Service. If the Government agrees, it is hard to imagine a firmer slap down for Michael Mates than backing a big expansion of Mr Staple's empire.

Mr Staple was understandably pleased yesterday. But what must worry him is whether the Government will also be so supportive, given all the commotion in Parliament and press over Asil Nadir.