FSA names Diamond's nemesis as tough new prosecutor

James Thompson
Thursday 09 August 2012 20:20

The Financial Services Authority has hired Tracey McDermott as its head of enforcement, making her the second woman to hold the role consecutively.

The City watchdog cited Ms McDermott's "impressive work" over the past 16 months as its acting director of the enforcement and financial crime division.

She imposed a £59.5m fine on Barclays, its biggest on an institution, over the Libor scandal that claimed the job of chief executive Bob Diamond. Separately, she secured 10 convictions for insider trading over the period. Ms McDermott will lead the enforcement unit at the Financial Conduct Authority when the FSA is split into two next year.

Having joined the FSA in 2001 as an associate in the enforcement division, she took on the acting role last year when Margaret Cole was appointed as managing director. Ms Cole left the FSA in March and it later emerged that she is joining the accountancy firm PwC.

Ms Cole said: "This is great news for Tracey and great for the FSA. It also gives the new Financial Conduct Authority continuity at such a critical time."

Lawyers applauded her appointment, noting that it sends a warning shot across the bows of the financial services industry and fraudsters.

Simon Morris, a partner at the law firm CMS Cameron McKenna, said: "She is a strong appointment, clear, tough and determined. She will make an excellent head of enforcement for a regulator that needs to raise its game."

He added: "I feel sorry for the malefactors of this world. Tracey will be a very stiff rod to beat their backs. Any firm currently cutting corners will soon have good cause to regret its sloppiness."

Peter Snowdon, a partner at law firm Norton Rose, advised "not to read too much" into the fact the FSA had chosen another woman for the role. He added: "I think it shows continuity. She is very much associated with the [tough] message that has come down from senior management at the FSA." Under her watch, the FSA imposed a record retail fine of £10.5m on HSBC for inappropriate investment advice given by one of its units.

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