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Appeals slow FSA disciplinary process

The Guardian: Appeals slow FSA disciplinary process

“The latest high-profile application to the tribunal was made last week by Sir Philip Watts, former chairman of Shell…”

JILL TREANOR

Sep 22, 2004

The Financial Services Authority admitted last night the rising number of appeals against fines it levies on firms and individuals breaking City rules was slowing down the disciplinary process.

Last year the FSA’s new chief executive, John Tiner, pledged to speed up the time it took the regulator to carry out inquiries. Callum McCarthy, the FSA chairman, told a City audience last night that appeals to the financial services and markets tribunal was preventing the regulator reaching this goal. He said that “the increased recourse to the tribunal may sadly not result in faster decisions or faster justice overall”.

The latest high-profile application to the tribunal was made last week by Sir Philip Watts, former chairman of Shell, taking the number of appeals lodged this year to 24. There were 23 in the whole of 2003.

Mr McCarthy said the FSA had cut the time it took to investigate alleged rule breaches by 30%. “But this improvement may be outweighed by other developments,” he said, referring to the tribunal.

Appeals to the tribunal would lead to “delay and to additional costs”, he said.

He indicated that he hoped Britain would not become as litigious as the US.

He said he hoped the FSA’s regulatory decisions committee would be able to deter appeals to the tribunal. The committee is the body to which the FSA’s enforcement officials present cases for fines and other disciplinary action. At present it does not have a chairman – Christopher Fitzgerald resigned following discrepancies uncovered during a tribunal hearing the appeal by Paul “The Plumber” Davidson over a pounds 750,000 fine for market abuse.

“I continue to hope that we can maintain confidence in our regulatory decisions committee process and promote efficient, orderly and clean markets without a dramatic increase in the number of cases referred to the tribunal.

“It is in all our interests – not simply the FSA’s – that this should happen,” Mr McCarthy said.

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