* Cole latest senior official to leave before FSA scrapped
* Cole seen as face of FSA "credible deterrence" policy
By Huw Jones
LONDON, Feb 15 The Financial Services
Authority's top enforcer Margaret Cole steps down in March after
nearly seven years at the UK watchdog where she raised industry
hackles by radically altering how market abusers are pursued.
Cole joined the FSA in 2005 and beefed up enforcement by
issuing record fines and targetting top names in the industry,
slapping a 7.2 million pound penalty on U.S. hedge fund star
David Einhorn and his Greenlight Capital fund last month.
The FSA is being scrapped at the start of next year and Cole
joins a growing list of officials who are leaving after being
passed over for top jobs in the new set up.
Enforcement will be taken over by a new Financial Conduct
Authority headed by Martin Wheatley.
Cole, a tough-talking, high-flying litigator, had hopes for
the top job too and her stint at the FSA will make her much
sought after back in private practice.
"We have shown the FSA is not afraid to take on difficult
cases and will not shy away from pursuing criminal prosecutions,
however difficult to prove," Cole said in a statement.
Last year the FSA secured 11 convictions for insider dealing
with sixteen awaiting trial and fines levied totalled 66 million
"It's painstaking work and the legal process takes a long
time but there are people sitting in prison now because of our
commitment. And the next 12 months will see more trials and more
convictions as the pipeline of our cases comes to fruition in
the courts," she added.
Cole was instrumental in pushing financial crime to the top
of the FSA's agenda as the watchdog sought to ditch its light
touch reputation in the run up to the financial crisis.
She ruffled feathers in the financial sector with the
methods she used to track down market abusers, such as resorting
to the criminal courts rather than pursuing less punitive
enforcement cases which was the typical FSA method in the past.
FACE OF DETERRENCE
FSA Chairman Adair Turner said Cole's outstanding
contribution has made a lasting impact.
Cole began working in tandem with the Serious Organised
Crime Agency (SOCA) to crack down on insider dealing, mimicking
how the FSA's U.S. counterpart, the Securities and Exchange
Commission sometimes works with the U.S. Dept. of Justice.
"I think she has changed the role of regulatory enforcement
in Britain beyond recognition and created a very significant
deterrence in areas she chose to focus on," said Etay Katz, a
partner at Allen & Overy and former colleague of Cole at White &
"The trend of pursuing criminal prosecutions as an integral
theme in the regulatory arsenal is the big win. For people
operating in the financial sector, the threat of a criminal
prosecution is the ultimate deterrent," Katz said.
Jonathan Herbst, a financial services partner at Norton Rose
said there are differing views over Cole and her strategy.
"However, she clearly made the FSA a credible and seriously
regarded enforcement agency. To be fair to her and the
organisation, things had to change post-crisis," Herbst said.
"The more interesting question is where do they go from
here. Do they need to have more dialogue with the industry or
will the deterrence policy continue unchanged at the FCA?"
Tim Dolan, a partner at Pinsent Masons lawfirm and former
FSA enforcement team member, said, "It will be interesting to
see whether the FSA manages to retain other senior staff during
the course of 2012, as the break up of the FSA and the
establishment of the new regulators takes place."