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Plea bargains to help FSA net fraudsters
City fraudsters will be offered US-style plea bargains to help bring major offenders to justice from this autumn. Britain's financial services watchdog, the Financial Services Authority, is taking the step in the wake of its failure to prevent the banking crisis.
Whistleblowers would be granted immunity from prosecution, either by the FSA or the Business Secretary, Lord Mandelson, if they testify against ringleaders guilty of crimes, such as insider dealing. The FSA is also negotiating further powers to help it prosecute more aggressively amid concerns that collapsing financial markets are often associated with increased fraud.
The FSA's chief executive, Hector Sants, outlined the tougher approach last week and warned that in future the City should be "very frightened" of the watchdog, previously criticised as toothless. New chairman Lord Turner will this week publish a review of future financial regulation expected to cover larger hedge funds for the first time and measures to discourage bonuses deemed to encourage excessive risk-taking, such as those that exceed total salary.
Plea bargains enable US authorities to pursue complex white-collar crime, but they have been controversial because of the potential to avoid prison. John McFall, the chairman of the Treasury select committee, said the plea-bargaining powers - embedded in the Coroners and Justice Bill, which reaches its critical stages in the House of Commons next week - were an "important first step" to prosecuting financial crime but said the government had dragged its feet for too long. "I won't be satisfied until this is on the statute books," he said. "But it's a good start."
Shadow chancellor George Osborne has called for more active prosecutions and the Tories are suggesting the FSA be stripped of its powers to investigate because of past failures.
City fraudsters will be offered US-style plea bargains to help bring major offenders to justice from this autumn. Britain's financial services watchdog, the Financial Services Authority, is taking the step in the wake of its failure to prevent the banking crisis.
Whistleblowers would be granted immunity from prosecution, either by the FSA or the Business Secretary, Lord Mandelson, if they testify against ringleaders guilty of crimes, such as insider dealing. The FSA is also negotiating further powers to help it prosecute more aggressively amid concerns that collapsing financial markets are often associated with increased fraud.
The FSA's chief executive, Hector Sants, outlined the tougher approach last week and warned that in future the City should be "very frightened" of the watchdog, previously criticised as toothless. New chairman Lord Turner will this week publish a review of future financial regulation expected to cover larger hedge funds for the first time and measures to discourage bonuses deemed to encourage excessive risk-taking, such as those that exceed total salary.
Plea bargains enable US authorities to pursue complex white-collar crime, but they have been controversial because of the potential to avoid prison. John McFall, the chairman of the Treasury select committee, said the plea-bargaining powers - embedded in the Coroners and Justice Bill, which reaches its critical stages in the House of Commons next week - were an "important first step" to prosecuting financial crime but said the government had dragged its feet for too long. "I won't be satisfied until this is on the statute books," he said. "But it's a good start."
Shadow chancellor George Osborne has called for more active prosecutions and the Tories are suggesting the FSA be stripped of its powers to investigate because of past failures.
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