Sky News business editor Michael Wilson

I wonder if insider traders are getting worried. The City watchdog is threatening more criminal prosecutions for traders who cheat by manipulating the market to their advantage.

The Financial Services Authority has more than doubled the size of its investigating team as part of a much tougher crackdown on insider trading.

Well, I wish them luck.

First,'insider knowledge' is no crime. Where the use of it strays into criminality is a very grey and ill-defined area.

Long before the Financial Services Authority was born, the City's Serious Fraud Office tried to grapple with the detail of various insider trading scandals and came up with very few bodies.

The detail of the cases was so complicated, apart from anything else, that there was a proposal to dispense with juries because it was impossible to find 12 good persons and true to whom a comprehensible case could be made, for either the prosecution or the defence.

Second, it's difficult to get the staff. Or at least it's difficult to get the staff to stay in the regulators' ranks.

After they've become wise in the ways of the watchdogs, they become natural prey for much better paying positions from City companies on the poacher's side of job opportunities. Public sector salaries simply aren't up to that temptation.

Or it becomes a career move. Witness the head of the Serious Fraud Office who 'retired' after the controversy over the dropping of the investigation into the BAE System's arms deals with Saudi Arabia.

Robert Wardle is now working for a leading corporate crime and investgations law firm - and joins a team that includes former employees of the Financial Services Authority, the Office of Fair Trading the police.

Nothing wrong with that - but it's just a further example of the kind of expertise which is up for sale and gives
the City a considerable adavantage over those who would police it.

The FSA is saying that it's reduced its headcount, employing fewer, but more highly paid staff,and says 'we feel the need to be bold.'

In order to establish its authority, the watchdog needs a big, successful prosecution soon.

Comments

[Michael Cornwall 7 May 2008 11:43:21]

I would be very careful who I trusted.

[Bill, Middle England 7 May 2008 08:51:18]

As Khalid implies, the FSA is a badly organised ill-conceived and overly-bureaucratic organ of Govt.

And, of course, who created it!!

Another fine mess from the "greatest" Chancellor in living memory

[Dennis, Cramlington Northumberland 6 May 2008 18:17:02]

Perhaps the new tough body will prove it's worth from the outset, by coming up with whoever was behind the leaking of any confidential information - the sort which might have caused the 'Bank Run' on Northern Rock bringing a fine profitable and solvent Company to it's knees, and so much misery to the innocent shareholder victims.

And, of course, whether anyone along the way profited in any murky dealings.

If they do uncover any cheating then perhaps the evidence could pass the proceeds to some Robin Hood-wink figure to pretend to redistribute the wealth back to the poor.

[Khalid 6 May 2008 17:27:21]

Sir
Thus far as the FSA, then I stand by my earlier culminations thus far as to say it is a body corporate not worth the expense.
Indeed, as with many an industry, wages do by far and large play to the appetite of those that cannot take it with them to the oherside, however, can we blame them? In short, no, but is it not ironic how such fundamental of legislative rights are allowed in the real world, yet if I take the example of Jobcentreplus, they are thereby allowed to manipulate the law to suit and do so with sanction of James Purnell.
Now, if the FSA want to get its teeth into a successful prosecution, then perhaps it approached James Purnell, serve him with the Jobseekers Act 1995 and give him 24hrs to tell me where does it say that by law any jobseeker must attend a New Deal nonsense class or face benefit sanction? If he can find such legislature, I will work for the FSA for a cool £1Million.
If he can;t then he had better get a defence sorted out because the sanctioning and impositioning objective of New Deal is not lawful and remains yet another perverse and immature policy doctrine.
So, any jobs going at [Sky] or is it [Son-i-que]?