The Financial Services Authority's head of enforcement has admitted that the City watchdog has not been doing enough to tackle financial crime and vowed to increase the number of criminal prosecutions it pursues.
In a lecture at New York?s Fordham Law School yesterday, Margaret Cole admitted that the FSA had a poor record in bringing criminal prosecutions and could learn from the US, where such cases are much more common, partly because American regulators enjoy a far greater level of public support for criminal cases.
Conceeding that the FSA had only brought one criminal prosecution in the nine years since it was set up, Ms Cole, a former litigator at White & Case before joining the regulator earlier this year, said: "We expect to bring more criminal prosecutions going forward."
Lawyers said that Ms Cole?s comments may herald a change of tactics at the watchdog, which has previously focused on bringing civil prosecutions. The penalties are softer but the burden of proof is less exacting and so cases are more likely to succeed.
The regulator enjoyed a recent success in its civil case against GLG Partners, a London hedge fund, and its star trader Phillipe Jabre, who were each fined ?750,000 for market abuse. Mr Jabre?s fine was the largest the FSA has given to an individual.
Ms Cole defended the UK?s overall light-touch approach to regulation, highlighting the London Stock Exchange as an example of its success. The LSE had attracted 59 international companies to list in London so far this year while the New York and Nasdaq stock markets listed just 17 foreign businesses between them.