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28/03/2008
City Traders Face Closer Scrutiny
Chancellor Alistair Darling wants to give the Financial Services Authority and the City watchdog more power.
Mr Darling plans to give the City watchdog the power to offer those who give evidence about market manipulation immunity from prosecution.
The planned action follows HBOS shares crashing last week by what was labelled as a "whispering campaign".
In an interview with the Guardian, the Chancellor said: "I can’t allow us to get into a situation where people quite deliberately manipulate markets for personal gain and with the potential to destabilise the financial system.
"We have a duty to ensure we have clean and efficient markets. We will come down hard on people manipulating the system."
Under the proposals, which will need to go through the normal legislative process, the FSA would get plea bargaining powers and the watchdog would get "specified prosecutor" status.
The FSA who has lobbied for more powers has welcomed the move.
Chris Brennan, one of the partners at law firm Barlow Lyde & Glbert said that the proposed changes may not succeed in putting a stop to market manipulation.
"It is extremely difficult to prosecute. Insider dealing often involves purely circumstantial evidence that is not sufficient in most criminal cases.
"I am not sure the whistleblowing provisions will help, but the plea bargaining may well incentivise individuals to plead and avoid the need for a trial."
HBOS shares fell by almost 17% prompting the FSA to warn that it would "not tolerate traders starting false rumours" about firms to make cash.
(DS)
Mr Darling plans to give the City watchdog the power to offer those who give evidence about market manipulation immunity from prosecution.
The planned action follows HBOS shares crashing last week by what was labelled as a "whispering campaign".
In an interview with the Guardian, the Chancellor said: "I can’t allow us to get into a situation where people quite deliberately manipulate markets for personal gain and with the potential to destabilise the financial system.
"We have a duty to ensure we have clean and efficient markets. We will come down hard on people manipulating the system."
Under the proposals, which will need to go through the normal legislative process, the FSA would get plea bargaining powers and the watchdog would get "specified prosecutor" status.
The FSA who has lobbied for more powers has welcomed the move.
Chris Brennan, one of the partners at law firm Barlow Lyde & Glbert said that the proposed changes may not succeed in putting a stop to market manipulation.
"It is extremely difficult to prosecute. Insider dealing often involves purely circumstantial evidence that is not sufficient in most criminal cases.
"I am not sure the whistleblowing provisions will help, but the plea bargaining may well incentivise individuals to plead and avoid the need for a trial."
HBOS shares fell by almost 17% prompting the FSA to warn that it would "not tolerate traders starting false rumours" about firms to make cash.
(DS)
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