Monday, October 29, 2012

Why the UK doesn't want to prosecute financial crimes

Copied from the Treasure Islands blog:

From the blog of Rowan Bosworth-Davies, a former UK detective and legal consultant advising financial institutions:
I have never tried to disguise my contempt for the way in which the lead regulator has consistently failed to use their prosecutorial powers to bring actions against financial criminals.
. . .
Criminalising the bastards is the only way to take them down, and exclude them from the financial sector. It is a solution whose time came of age a long time ago, and I don't know what is stopping it being used aggressively, remorselessly and with maximum prejudice.
. . .
The FSA has routinely ignored the responsibility given to it by Parliament
And among several answers he says, with penetrating insight,
"I think it is a class issue."
Indeed. If you are a grubby housebreaker, you meet the full force of the law. If you are a criminally-inclined City grandee, you are in the clear. He describes the old revolving door factor, and produces some pretty unveiled comments from insiders about how they don't want to prosecute financial crime.
This blog is full of fascinating anecdotes, such as this one:
"I was once approached at a public conference by a young German woman who asked me if she could have a copy of my paper which I had just presented.  I asked her why she wanted it and she told me that she had been seconded to the FSA from Goldman Sachs for a year's sabbatical. The FSA had entrusted her with formulating their Financial Crime policy, but knowing nothing about financial crime, she was going to every conference she could find and blagging copies of papers she had listened to which she thought might be useful to her.

I rang her manager and suggested that the FSA hire me for a couple of weeks to come in and teach this young woman what she needed to know about financial crime so that she could make a genuinely valid contribution to the debate. His answer was interesting. He said;

'...Why on earth would be bother to consult you? If we need any low-level consulting of this kind we can get it all for free from one of the Big 4 consulting firms. They do it for nothing for us because they like to be privy to our thinking...'"
Read the whole blog. It's devastating. This goes a long way towards explaining why the City of London is as big and powerful as it is.

(If you liked that, you might also like Why Does the SEC Protect Banks’ Dirty Secrets?)


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