Reuters logo
UPDATE 1-UK FSA's top enforcer Cole to depart in March
February 15, 2012 / 6:01 PM / in 6 years

UPDATE 1-UK FSA's top enforcer Cole to depart in March

* Cole latest senior official to leave before FSA scrapped

* Cole seen as face of FSA “credible deterrence” policy

By Huw Jones

LONDON, Feb 15 (Reuters) - 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 pounds.

“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.


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 & Case lawfirm.

“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?” Herbst said.

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.”

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below