This morning berg Chief Executive Alison Loveday joined Rob Young, Mickey Clarke and the BBC Radio 5 Live Wake up To Money team as two significant legal rulings yesterday lead to questions on whether the authorities are getting tougher on those who play the financial markets.
The two rulings focus on trader Navinder Sing Sarao who it was ruled will be extradited to the US Over claims he caused the flash crash, which temporarily wiped $800 billion from the value of US stock market listed companies, from his parents’ house in South West London meanwhile jailed Libor Trader Tom Hayes who is serving an 11 year sentence for manipulating Libor interest rates has been ordered to pay almost £900,000 after a court ruled the sum was the proceeds of crime.
So are the authorities cracking down? Alison Loveday talking to Radio 5 Live says no
That’s not my sense at all, there’s a marked reluctance by regulators to get involved and we haven’t seen anything like the action that consumers and businesses who have been affected, need
It’s a lot to do with lack of resource and seems to be a big problem without the financial backing to solve it. There’s much more of an appetite to prosecute in America, its important there is transparency into what’s going on and it’s difficult to improve and move forward until we get that”
Do cases fall between regulators and prosecutors?
“ I think that’s right a lot of the regulator’s powers are much more focused on the consumer rather than small businesses and are not suited for very large multiple organisations like the banks”
With recent introduction of new regulation and accountability does this mean city regulators have more power and are things better than they were?
“ We’ll have to see how things play out. The senior managers regime has been introduced so let’s see if it’s used and if the accountability that everybody hopes it brings will play out. For example on the flash trading we have no regulation that would deal with that there are proposals for regulation but we still have nothing at present”
Are enquiries taking too long?
“Absolutely, the HBOS enquiry for example went on for years and we certainly felt the outcome was very unsatisfactory. The FCA review into RBS Global Restructuring Group was announced in 2014 and we still don’t have any outcome. The Sarao case is from 2010 and shows how our legislation is struggling to keep up with technology and global markets.”
Is the problem lack of laws or rules or unwillingness from authorities.
“ I think there’s plenty of regulation and legislation that can be used, certainly in the UK the real issue is the appetite to pursue”
Are agencies up to the task?
My personal view is regulators are really struggling. I think the serious fraud office do have the capability and it’s a resource issue but within the regulator they are becoming overwhelmed with too many tasks and there are and have been questions over independence. We are advocates for business and it would be nice to find a way through this but at the moment we would be wrong placing all of our trusts in the regulators
To find out more about the issues raised in this post, or to discuss any queries regarding financial or regulatory failure get in touch with Alison Loveday or call 0161 829 2599.
The information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by berg or any of its partners or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.