Financial Times: FSA considers further criminal actions: “Last month, the FSA agreed a £17m (9.6m) penalty with Shell for market abuse associated with its mis-statement of oil and gas reserves.” (ShellNews.net)

By Andrew Parker, Financial Correspondent

Published: September 7 2004

The Financial Services Authority is considering whether it should bring more criminal prosecutions because of the need to deter corporate wrongdoing.

Andrew Procter, FSA head of enforcement, signalled yesterday that he wanted the financial regulator to bring more cases against directors following some high-profile actions against companies.

Through enforcement actions, the FSA can seek to ban individuals from holding senior positions in the financial services industry. It can also propose fines.

Mr Procter told the FSA annual enforcement conference in London: "We need to . . . ask ourselves do we need more criminal prosecutions in order to send a more powerful message on deterrence?"

The FSA has only one criminal prosecution pending. Three former directors of AIT group, a software company, appeared in court in February in a prosecution for market abuse.

Mr Procter said he was against the FSA raising its fines on companies to match the penalties imposed by the Securities and Exchange Commission, the chief US financial regulator.

Last month, the FSA agreed a £17m (9.6m) penalty with Shell for market abuse associated with its mis-statement of oil and gas reserves.

The SEC agreed a $120m fine with Shell and Mr Procter, noting criticism the FSA penalty had not been big enough, said: "My personal view is we should not leap to a US level."

Mr Procter said the FSA should examine the alternatives, including more enforcement actions against individuals and more criminal prosecutions. The SEC, unlike the FSA, cannot bring criminal prosecutions.

John Tiner, FSA chief executive, said fines were set at levels that would send a strong message to senior management and in some cases encourage shareholders to demand resignations.

Fines, he said, should also attract publicity that would damage a company's brand value and reputation but not "hit hard into the pockets of shareholders who may have already seen their share price fall".