FSA investigators may get ‘special powers’

Mar 29 2008 by Peter McCusker, The Journal

CITY whistleblowers could soon be offered immunity from prosecution under plans to beef up the UK’s financial watchdog, Chancellor Alistair Darling has indicated.

The Government was urged to grant the Financial Services Authority (FSA) US-style powers in the wake of last week’s slump in a major bank’s share price amid claims of market manipulation.

A London-based hedge fund was reported to have circulated rumours about UK companies, including Britain’s biggest mortgage lender HBOS in a bid to make money when their share prices fell.

Amid global financial turmoil, Mr Darling said he wanted to see a crackdown.

“I can’t allow us to get into a situation where people quite deliberately manipulate markets for personal gain and with the potential to de stabilise 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.

“People are getting away with it and the time has come for us to start looking at it again.

“If a handful of people are up to no good we have to make sure the authorities have the tools to do the job.” One report said this meant FSA investigators would be given the “specified prosecutor” status already enjoyed by tax officials, the Serious Fraud Office and the director of public prosecutions.

A spokeswoman for the FSA, which has asked for the powers, welcomed the move, part of a package of measures designed to tackle the present worldwide period of uncertainty.