Pinstripes and prison stripes

The FSA could take the view that the criminal law is pretty much irrelevant to enforcement of its rulebook, says Steven Francis; yet it is convinced that imprisonment for such offences as insider dealing works. He considers the regulator’s criminal agenda and the issues these cases raise for compliance staff.

Steven Francis (steven.francis@rpc.co.uk) is a financial regulatory partner at the law firm Reynolds Porter Chamberlain.

When the FSA came into being back in 2000, a great deal of thought was given to the nature of the legal process it should follow in order to discipline those subject to its jurisdiction. Should the process be criminal, civil, or some hybrid? In fact the FSA’s disciplinary procedure has been enormously successful. It involves a process that is not unduly legalistic and is capable of operating quite rapidly. Through it the vast majority of disciplinary cases are resolved by agreement rather than fought to any form of third party determination. Despite worries that the procedure operated unfairly to the detriment of those under investigation, the enforcement process review, published in July 2005, and the implementation of its findings, quelled many of those concerns.