View from City Road: Wrongdoers should be hit in the pocket
Thursday 17 June 1993
If a fine is to have the desired effect it must make a financial as well as a public relations impact. Money is the language City firms understand best. Only the pounds 750,000 fine imposed by Imro on Invesco MIM even started to get the message across.
City firms protest that the damage to their reputation is what matters. The shame felt by Guardian Royal Exchange, Scottish Widows and Norwich Union - all fined by Lautro - was more effective than any fine in getting them to change their ways, or so the theory goes.
But City memories are short. Consider the way in which Morgan Grenfell, National Westminster and UBS have recovered their standing in the wake of their involvements in the Guinness and Blue Arrow affairs. It has not taken long, even though all three were hauled over the coals in public. Some firms have even won government business.
The same cannot be said of individuals. Many of those who were caught up in the Guinness or Blue Arrow scandals are no longer able to work in the City. With this in mind, it is a pity that the Securities and Futures Authority did not identify the people responsible for Goldman's misdemeanours.
Goldman may find the going difficult for a long time yet - while the Maxwell affair stays in the headlines. The same may well turn out to be true of other firms involved. But the long-term outlook for any City firm caught up in a scandal is far from terminal unless it is hit where it hurts, which is in the pocket.
Raising fines would do wonders to the cost of City regulation. The proceeds could be used to reduce levies and even fund compensation to those who lose out from wrongdoing.
Vladimir Putin employs a full-time food taster to ensure his meals aren't poisoned
Peaches Geldof: Her final day – and her fatal decision
Chief Ebola doctor in Sierra Leone has contracted the deadly disease himself
Students offered grants if they tweet pro-Israeli propaganda
Israel-Gaza conflict: Israel may have committed war crimes, says UN human rights chief
Malaysia Airlines MH17 crash: Vladimir Putin is given 'one last chance' to end hostilities in Ukraine
The 'scroungers’ fight back: The welfare claimants battling to alter stereotypes
The truth about conspiracy theories is that some require considering
Malaysia Airlines MH17 crash: Massive rise in sale of British arms to Russia
Malaysia Airlines MH17 crash: Ukrainian military jet was flying close to passenger plane before it was shot down, says Russian officer
Malaysia Airlines MH17 crash: victims’ bodies bundled in black bags and loaded onto trains
iJobs Money & Business
£400 - £420 per day: Orgtel: IT Transition Manager - Banking - Scotland - £400...
£350 - £400 per day: Orgtel: Test Lead, London, Banking, Financial Reporting, ...
£375 - £400 per day + competitive: Orgtel: My client, a leading bank, is curre...
£350 - £400 per day: Orgtel: PMO Analyst - Banking - London - £350 -£400 per d...