The Seventh Annual A.A. Sommer, Jr. Lecture on Corporate, Securities & Financial Law: The U.K FSA: Nobody Does It Better?
Fordham Journal of Corporate &
U.K FSA: Nobody Does It Better?
Dean William Michael Treanor Welcome
Ben A. Indek Opening Remarksy
Jill E. Fisch Opening Remarksz
William Michael Treanor1
Fordham University School of Law
Ben A. Indek2
Morgan, Lewis & Bockius LLP
Jill E. Fisch3
Fordham University School of Law
United Kingdom Financial Services Authority
† Margaret Cole delivered this address at Fordham University School of Law on
October 17, 2006. It has been edited to remove minor cadences of speech that appear
awkward in writing and to provide sources and references to other explanatory material
in respect of certain statements by the speakers.
1. William M. Treanor is the Dean and Professor of Law at Fordham University
School of Law.
2. Ben A. Indek is a partner in the securities litigation practice of Morgan, Lewis
& Bockius LLP.
3. Jill E. Fisch is the T.J. Maloney Chair in Business Law at Fordham University
School of Law and is the Director of the Fordham Center for Corporate, Securities and
4. Margaret Cole is the Director of Enforcement of the Financial Services
DEAN TREANOR: I’m Bill Treanor. I’m the Dean of Fordham
Law School. It’s my pleasure to welcome you to tonight’s event, which
is the Seventh Annual A.A. Sommer, Jr. Lecture on Corporate,
Securities and Financial Law.
Fordham is a school that has always taken incredible pride in its
business law offerings. We’re a school that is ranked in the top twenty
nationally in terms of our business law program.5
We have really an extraordinary faculty. This year we welcome
two new corporate law hires: Sean Griffith6 and Richard Squire.7 We
have a remarkable adjunct faculty that brings leading practitioners in to
offer courses on really the cutting edge of practice.
We have a journal, the Fordham Journal of Corporate & Financial
Law,8 which I am now holding up to you. It has been cited by the
Supreme Court.9 It is available outside.
And we also have—and are now, I think, in the fifth year of—our
Corporate Center, which really brings it all together.10 I’d like to thank
the leadership of the Corporate Law Center. John Peloso,11 who is with
us here today, has really led the way and was really a visionary in this
area, so I wanted to thank John.
We have a remarkable faculty who has always supported it. I see
Gus Katsoris12 here, who is a legend in the business law field. We have
two brilliant faculty directors: Jill Fisch, who is one of the leaders in
corporate law in the country, has just been so superb; and Caroline
Gentile,13 who has really done an amazing job in her relatively brief
period at Fordham, comes to us from Cravath. Ann Rakoff14 has
provided great leadership this year.
And again, the Corporate Center is really our jewel, and of its
jewels the A.A. Sommer, Jr. Lecture is really something that we have
taken such great pride in since its origins.
We are joined here tonight by Starr Sommer. Thank you very much
for coming up from Washington to be here tonight.
It should be a fabulous lecture. Our lecturer tonight is really an
extraordinary one, Margaret Cole, who is, as I assume you all know, one
of London’s most experienced and respected financial services litigators.
She became the Director of Enforcement of the Financial Services
Authority (FSA) in July of 2005.15 The FSA regulates all financial
services in the United Kingdom (U.K.), including the banking,
insurance, mortgage, and securities industries. We’re just so delighted
that she is here tonight delivering this great lecture, continuing really
such a fabulous series.
Now, to do the formal introduction, it’s my pleasure to introduce
Ben Indek, a Partner at Morgan, Lewis & Bockius, who will present
tonight’s opening remarks.
MR. INDEK: Good evening, everybody. On behalf of Morgan,
Lewis & Bockius, welcome to the Seventh Annual A.A. Sommer, Jr.
This lecture was established by Morgan Lewis to honor our partner
most identified with the securities industry. Al Sommer was a Partner at
Morgan Lewis from 1979 until 1994, when he became counsel to the
firm and its clients. He was a terrific lawyer and a prolific author and
commentator on a wide range of securities law issues. Al is best known
for his service as an SEC Commissioner from 1973–1976, and as
Chairman of the Public Oversight Board of the American Institute of
13. Caroline Gentile is an Associate Professor of Law at Fordham University
School of Law.
14. Ann Rakoff is the Executive Director of the Fordham Center for Corporate,
Securities and Financial Law.
15. For more information, please visit the Financial Services Authority website,
http://www.fsa.gov.uk (last visited Jan. 23, 2007).
I am particularly pleased that Margaret Cole, the U.K. FSA’s
Director of Enforcement, will deliver tonight’s lecture for two reasons.
First, over the last ten months in which I’ve gotten to know Margaret, I
came to see that, because of her years spent in the defense bar, Margaret
would take a practical approach to issues, but, at the same time, be a
passionate regulator, with a no-nonsense attitude towards securities law
violators. As a private lawyer and government regulator, I think Al
would have appreciated both qualities.
Second, Margaret’s remarks on U.K. enforcement issues would
have been of keen interest to Al. In addition to being a preeminent
expert in U.S. securities law, Al had an interest and expertise in
international law issues. For example, Al was an active member of the
International Bar Association,17 where, among other things, he was
Deputy Chairman of the Capital Markets Forum.18 He also acted as a
consultant to several foreign countries on the development of their
securities laws and regulations, including being an advisor to the U.K.’s
Office of Fair Trading in 1983.19 It is clear that Al would have enjoyed
hearing what our keynote speaker has to say about U.K. regulation.
Al was with us for the first two lectures to introduce our speaker,
but passed away in 2002 after a long illness. He is represented here
tonight, as Dean Treanor has indicated, by his wife, Starr, who came up
from Washington, and his son-in-law Jeff. We are honored that they
could attend tonight’s lecture.
When Al joined our firm twenty-seven years ago, he came to start a
securities law practice. Today, we have more than 100 lawyers in about
a half-a-dozen cities in that practice. Those cities now include London,
where we have a new and vibrant securities practice, a fact that would
have tickled Al. All of these lawyers are dedicated to serving the
securities industry on broker-dealer, investment advisor, investment
company, enforcement defense, securities litigation and white-collar
16. American Institute of Certified Public Accountants. For more information,
please visit the AICPA website, http://www.aicpa.org (last visited Jan. 23, 2007).
17. For more information, please visit the International Bar Association website,
http://www.ibanet.org (last visited Jan. 23, 2007).
18. For more information, please visit the Capital Markets Forum website,
http://www.ibanet.org/legalpractice/Capital_Markets_Forum.cfm (last visited Jan. 23,
19. For more information, please visit the Office of Fair Trading website,
http://www.oft.gov.uk/default.htm (last visited Jan. 23, 2007).
issues. We are also active in the public company accounting and
corporate governance areas.
We are proud of Al’s affiliation with Morgan Lewis and delighted
to sponsor this annual lecture in his honor.
I’m pleased to turn tonight’s proceedings over to Jill Fisch, the
Director of Fordham’s Center for Corporate, Securities & Financial Law
and our host this evening.
PROF. FISCH: Good evening. I’m Jill Fisch. I’m the Director of
The Fordham Center for Corporate, Securities & Financial Law. I’m
delighted to welcome you on behalf of the Fordham Law community to
the Seventh Annual A.A. Sommer, Jr. Lecture.
I would like to express the School’s deep gratitude to the firm of
Morgan, Lewis & Bockius for their generosity in establishing the
lecture. I’m delighted that Al Sommer’s family could join us tonight. I
also want to express our pleasure that the SEC Historical Society20 is
joining us tonight. I’d also like to thank Margaret Cole for agreeing to
deliver the lecture.
In the few short years since its inception—and you might think,
well, okay, what was the reaction to corporate governance scandals?
Congress passed Sarbanes-Oxley.21 Fordham established the Corporate
Center. Everybody deals with things in their own way.
In the few short years since its inception, the Fordham Corporate
Center has developed a reputation for bringing the finest legal and
business talent to the Law School. Recent public lectures have included
Congressman Oxley’s speech last month, “Securing the U.S. Economy:
Protecting Investors in Our Capital Markets,” and New York Attorney
General Eliot Spitzer’s lecture last spring.22 Last year’s Sommer
Lecture was delivered by Citigroup General Counsel Edward Greene,23
and I’m delighted that he is here tonight as well. An additional public
program last spring, called “Bigger Carrots and Bigger Sticks,” featured
a panel discussion of issues and developments in corporate sentencing, a
topic of particular importance in light of the recent and ongoing series—
it seems like a never-ending series—of corporate governance scandals.
After options back-dating and pretexting, you wonder what’s next on the
The Corporate Center hosts a variety of other programs. We have a
Business Law Practitioners Series, which is geared to introducing our
students to developments and career options in business law. We have
policy-oriented roundtables, and more. We are partnering with
ALIABA24 to bring several of their programs in business law to Fordham
later this fall. And, of course, we at Fordham are very proud of both the
Securities Arbitration Clinic and the Fordham Journal of Corporate &
Financial Law. I know that many students from both of those programs
are in the audience tonight.
As you know, we at Fordham are delighted to host the Sommer
Lecture. The Dean used the word “jewel,” so I won’t. With the
assistance of Morgan Lewis and the Corporate Center’s Board of
Advisers, we have been fortunate in being able to attract the very cream
of the country’s—and now the world’s—leadership in business law to
speak here at the School. We have been privileged to hear the insights
of our speakers on significant legal developments and cutting-edge
If there has been a shortcoming in our programming, it has perhaps
been the failure to pay sufficient attention to global issues. Fordham
Law School, as you know, has a substantial number of foreign students,
an international LLM program, and a strong reputation in international
law. So I’m delighted that we’re addressing our ethnocentrism tonight
and broadening our focus with tonight’s speaker.
Traditionally, the United Kingdom and the United States have been
leaders in the capital markets. But there have been substantial
differences in their approach to regulation and enforcement. As you all
know, in the United States the Securities and Exchange Commission has
primary regulatory authority over the securities markets, and we have
had a number of SEC officials deliver prior Sommer Lectures.25
24. American Law Institute-American Bar Association. For more information,
please visit the ALI-ABA website, http://www.ali-aba.org (last visited Jan. 23, 2007).
25. See, e.g., The Sixth Annual A.A. Sommer, Jr. Lecture on Corporate, Securities
and Financial Law, 11 Fordham J. Corp. & Fin. L. 697 (2006) (Edward F. Greene,
former SEC general counsel); The Third Annual A.A. Sommer, Jr. Lecture on
Corporate, Securities and Financial Law, 8 Fordham J. Corp. & Fin. L. 33
(Harvey Goldschmid, SEC Commissioner) and The Inaugural A.A. Sommer, Jr. Lecture
on Corporate, Securities and Financial Law, 6 Fordham J. Corp. & Fin. L. 259 (2001)
(Hon. Arthur Leavitt, Jr., former SEC Chairman).
The SEC’s counterpart in the United Kingdom is the FSA. The
U.K. Financial Services Authority is an independent, nongovernmental
body, given statutory powers by the Financial Services and Markets Act
2000.26 It’s the single U.K. statutory regulator, with direct responsibility
for regulating deposit-taking, insurance, and investments.27 It is also the
listing authority for the admission of securities to the Official List.28
The FSA assumed the powers and responsibilities of ten separate
predecessor bodies. The statute sets out the FSA’s objectives as follows:
“market confidence, public awareness, consumer protection, and the
reduction of financial crime.”29
Margaret Cole was appointed to her present position, Director of
Enforcement at the FSA, in 2005. Ms. Cole, a solicitor with over twenty
years of experience in private practice, was previously a Partner in the
London office of White & Case, where she founded and headed the
firm’s Dispute Resolution Department. Her clients included the
European Bank for Reconstruction and Development, the Royal Bank of
Canada, and Crédit Agricole. In the 1990s, Ms. Cole led the actions to
recover the Maxwell Company pension funds on behalf of the fund
trustee and she succeeded in obtaining a global settlement restoring the
Ms. Cole is accredited by the Center for Effective Dispute
Resolution30 and the Alternative Dispute Resolution Group.31 She was
educated at Newhall Cambridge and graduated from the College of Law,
Lancaster Gate, with honors.
At the FSA, Ms. Cole leads a team of 270 and reports directly to the
FSA Chief Executive. Her work at the Enforcement Division includes
conducting investigations, administrative, civil and criminal
proceedings, obtaining redress for consumers, and working
cooperatively with the FSA’s domestic and international counterparts on
investigations and enforcement actions.
Here to ask—and perhaps answer—the question of whether the
FSA does it better is Margaret Cole.
MS. COLE: Mrs. Sommer and ladies and gentlemen, I am really
delighted and honored to be with you tonight and to have been asked to
deliver this Seventh Annual A.A. Sommer, Jr. Lecture on Corporate,
Securities and Financial Law, with the title, as you know, “The U.K.
FSA: Nobody Does It Better?” I was asked to suggest a catchy title for
my talk this evening. As you can see, I have followed the philosophy of
the Enforcement Division and been very bold and resolute in my choice
of a theme.
Standing in front of this distinguished audience here tonight, I am
wondering whether another title, perhaps another song title, comes to
mind, perhaps “Fools Rush In.”
But I note with interest that I am your first overseas speaker. As
such, I hope you are going to give me a bit of license to depart from
what is the usual British norm of understatement so that I can engage in
a bit of shameless “PR” for the U.K. Financial Services Authority and
how we go about our business.
My title does at least end with an interrogation mark. If this was a
debate, as the title suggests, I would be standing up here for the FSA and
there would be a long line of U.S. regulators ranged against me,
including the SEC, Federal Reserve Bank,32 CFTC,33 NASD,34
numerous regulators of insurance, numerous regulators of exchanges,
and others. They would all be on the other side of this very long table
opposing my motion.
Outnumbered I would be, yes. But, very solid in my convictions, I
would be arguing many of the points that I am going to raise today, such
as the benefits of having a unitary authority; how London’s philosophy
of “light-touch”35 regulation has helped it in becoming the world’s
32. For more information, please visit the Federal Reserve Board website,
http://www.federalreserve.gov (last visited Nov. 5, 2006).
33. Commodity Futures Trading Commission. For more information, please visit
the CFTC website, http://www.cftc.gov (last visited Nov. 5, 2006).
34. National Association of Securities Dealers. For more information, please visit
the NASD website, http://www.nasd.com/index.htm (last visited Nov. 5, 2006).
35. See John Tiner, FSA Chief Executive, U.K.’s Leading Role in the Adoption of
International Initiatives, Keynote Address at the BBA 10th Annual Supervision
leading center for mobile capital; how the FSA is not an
enforcementled regulator at all, but one that uses supervision and ongoing
relationships with the firms as its front-line means of regulation; and
how the FSA is recognized in the international community of regulators
as a thought leader, always seeking new approaches to better regulation,
demonstrated, for example, by our deliberate shift to more
principlesbased regulation. We continue to have our aspiration of being the most
admired and respected regulator globally.
I also want to mention some things that some of my opponents in
this hypothetical debate would almost certainly raise. They might well
say, for example, that there is a conspicuous absence of criminal
prosecutions of securities law violations in the United Kingdom; or that
the FSA’s resources are very widely spread across its huge jurisdiction;
or that the strategic approach to enforcement sends out selective
messages and allows some illicit activity to go unpunished.
Now, in this debate some such criticisms might be fairly argued.
But I would still argue that our model in the United Kingdom is an
innovative and highly effective one. It may not be the perfect model of
regulation, but I do genuinely believe that it is one that gets a lot of the
very important things right. I am also, however, the first to recognize
that there are many things that we can learn from you.
Now to some background about the FSA to give some context to
The FSA is a body, as Jill mentioned, that is operationally
independent of the U.K. government.36 We were set up in 1997 by the
then-incoming Labour administration. That was the second thing that
they did, after making the Bank of England37 independent in respect of
monetary policy. We are the result of a merger of ten predecessor
regulators. We are now a one-stop regulatory shop for virtually all
aspects of financial services regulation in the United Kingdom.
We are financed by fees levied on the firms, large and small, that
fall within our remit.
We have supervisory responsibility for wholesale and retail
markets, equities and derivatives trading, banking and insurance. The
FSA also acts as the competent authority for listing in the United
Kingdom. The scope of the activities we regulate was more recently
expanded to include mortgage and general insurance.38
One fact you may find of topical interest: we do not authorize or
regulate hedge funds, which is not to say that we’re not concerned about
the risks they pose. I’ll come back and say some more about that in a
We regulate an industry that employs one million people—the
population of the United Kingdom is just about 60 million people—and
accounts for 7% of GDP.39 We have 2,800 staff and a current budget of
As Jill mentioned, so I won’t take too long on it, the cornerstone of
our powers is the Financial Services and Markets Act 2000.41 We rather
inelegantly shortened that to FSMA. FSMA gave us a wide range of
rulemaking, investigatory, and enforcement powers and certain
important responsibilities, including the ability to take action to prevent
market abuse and to prosecute offenders for insider dealing.42
FSMA also gave us those four statutory objectives that were
mentioned previously: firstly, market confidence, maintaining
confidence in the financial system; second, public awareness, promoting
public understanding of the financial system; third, consumer protection,
securing the appropriate degree of protection for consumers; and fourth,
the reduction of financial crime, reducing the extent to which it is
possible for a business to be used for a purpose connected with financial
Those objectives govern the way we carry out our general functions
and help ensure that the FSA is accountable in political, public, and legal
terms. We have to report annually to Parliament on how successful we
have been in meeting our objectives, and when we interpret those
objectives wrongly or fail to consider them we can be challenged in the
So we are a single regulator with a single aim: to promote the
statutory objectives, and we have, at last count, 30,000 firms and
165,000 individuals to regulate.45
Let me say something about our approach to regulation to deliver
Our clear preference is to encourage efficient markets. Our
philosophy is that only after market solutions have been exhausted
should regulatory initiatives be contemplated.
A very good example of this was the work done alongside the U.S.
Federal Reserve Bank, as well as the Swiss and German authorities, to
address concerns about growing operational risk associated with
confirmations for credit risk derivatives.46 This problem couldn’t be
solved by any one regulator or any one firm and required collaboration
between regulators in different countries, something which will, of
course, become increasingly essential in the global landscape of
Together, we met with the industry and set out the problem, and the
industry came back with proposals which the regulators discussed.
There was an agreement on approaches and tracking of improvements,
and I am pleased to say the results have been good.
There are numerous risks in the financial markets, so we adopt a
disciplined approach to identify the big-ticket risks to our objectives.
This risk-based approach is designed to align our finite resources with
addressing the big risks that matter the most. This means that we—and
others—need to accept that some things can and will go wrong, what we
refer to as a “non-zero-failure regime.” Our view is that, although the
idea that regulation should seek to eliminate all failures may be
appealing in theory, in practice it imposes prohibitive costs on the
industry and on consumers.
Now, the FSA’s decision to be a risk-based regulator is a conscious
and deliberate decision, and we regularly review the amount of risk that
we are prepared to accept and focus our resources on the risks that we
consider matter the most. We are keen to ensure that our regulatory
interventions always add to, rather than detract from, the positive impact
of market forces and really are justified in terms of the level of risk to
our statutory objectives and the consequences of harm that would
Consequently, even where empirical analysis shows that there has
been a market failure, we are not always convinced that regulatory
intervention is the most efficient and cost-effective form of correction.
Market failures can also be addressed using other mechanisms, such as
competition policy, or the FSA using its considerable influence with
market participants and their trade representatives to change firms’
policies, processes, and behaviors, without reaching for the
heavyhanded tool of the regulator’s rule book. The FSA is very firmly of the
view that regulators must be very wary of the damaging effects that they
can have on creativity, innovation and competition.
In support of this risk-based approach, the FSA is an advocate for
principles-based regulation. That’s why the focus is on the outcomes
rather than on the prescription of detailed rules. Targeting outcomes—
such as, for example, customers of financial firms treated fairly, or firms
holding financial resources sufficient for the risks they run—enables
companies to focus on the substance of what is good for their business,
their customers, and for society around them.
Now, the FSA’s eleven high-level principles for businesses have
been around since 2001 and set overarching requirements for all
financial services firms.47 They are the regulatory equivalent of first
principles that articulate what actions and behaviors we expect of firms.
We see real benefits for firms, markets, and consumers, as well as for
our own people, in tipping the balance materially towards principles and
away from prescription. We believe that providing firms with the
flexibility to decide more often for themselves what businesses
processes and controls should operate will better align good regulation
with good business practice.
We also believe that firms that seriously commit to a set of
outcome-based principles are in the best position to judge the detail of
47. See FSA’s Principles for Businesses, available at http://fsahandbook.info
/FSA/html/handbook/PRIN/2/1 (last visited Nov. 6, 2006).
how best to deliver those outcomes in the marketplace. By taking this
approach, we create incentives for firms to focus on compliance in
return for a regulatory dividend, and that’s less regulatory intervention.
We also think that a “tick-box” mentality towards rule compliance,
at the expense of judgment and real understanding of the business,
deskills the industry, because good people who like to exercise judgment
will leave that kind of environment, and we want to make sure that we
have good people in all sectors of the U.K. financial services industry.
However, an approach along these lines is not always easy—in fact,
it is never easy. Both regulators and the regulated find a sense of safety
and security in detailed rules, as they define the scope of their legal
exposure. But while rules-based standards are authoritative and
enforceable, they do not prevent dishonest practice.
We think that the regulator and the regulated must be bold enough
to accept some uncertainty and ambiguity and to manage any consequent
legal risks for the benefit of society and the markets as a whole. So, for
our part, when we ask questions of firms, we have to accept that the
answers might not always be precise and that there may be a range of
judgment-based outcomes which are acceptable.
In short, it’s a question of striking the right balance between
simplicity and detail. Einstein said, “Everything should be made as
simple as possible, but not simpler.”48
Now, the benefits of this light-touch approach to regulation are
borne out by the figures. I wouldn’t be a regulator without throwing in a
By the end of September this year, companies had raised more
capital on the main market of the London Stock Exchange, $26.7
billion,49 than the New York Stock Exchange and NASDAQ combined,
$26.4 billion50— and this didn’t even include the $6.7 billion raised on
the London Stock Exchange’s alternative investment market.51
The figures are even more stark when you look at international
IPOs. So far this year, the LSE has attracted fifty-nine deals worth
$15.9 billion, whilst the New York Stock Exchange and NASDAQ
together have only attracted seventeen deals worth $5.9 billion.52
Now, I’ll say straight away, I better had say it in front of this
audience, that I am not gloating about any of this—of course not,
absolutely not. And I do know that New York’s performance of late in
comparison to London has caused a great deal of concern in your
corridors of power. I understand that Mayor Bloomberg has recently
appointed a consultant to look at just this issue53 and that Treasury
Secretary Paulson has mobilized a team of experts to look at the effects
of the Sarbanes-Oxley legislation.54
However, I do believe, to use the words of a leading U.K. financial
journalist in The Daily Telegraph, that “there is a regulatory dividend
that London enjoys under the auspices of the Financial Services
Authority: and that that dividend has bolstered London’s status to
establish itself as the world’s leading center for mobile capital.”55
Now, this whole issue of our different regulatory approaches was
thrown into stark relief recently, when Ed Balls, Economic Secretary to
the Treasury—that’s a kind of Deputy Chancellor of the Exchequer—
announced a month ago that “the FSA will be given new powers to veto
rule changes to exchanges that it considers to be too draconian and
disproportionate in their impact.”56 The government was at pains to
emphasize that this unprecedented move was not protectionist and was
not aimed at deterring foreign buyers from buying on our exchanges.
ml (last visited Feb. 2, 2007) (note amount listed in pounds).
52. David Seifman, IPO Turf Wars – City Hires McKinsey to Study Biz Drain to
London, NEW YORK POST, Sept. 27, 2006, at 33.
53. See LSE Success Prompts New York Fight Back, AFX INTERNATIONAL FOCUS,
Sept. 24, 2006, available at
http://www.finanznachrichten.de/nachrichten-200609/artikel-7035593.asp (last visited Jan. 12, 2007).
54. See Paul Tharp, Paulson Posse Targets Sarbanes, N.Y. POST, Oct. 11, 2006, at
55. Damian Reece, London Confirms its Reputation as the Capital City, DAILY
TELEGRAPH, Sept. 27, 2006, at 2.
56. Ed Balls, Economic Secretary to the Treasury, Financial Services: a U.K.
Perspective, Address at the Hong Kong Chamber of Commerce and the British
Chamber of Commerce (Sept. 13, 2006), available at
6.cfm (last visited Jan. 23, 2007).
However, it is clear that the possibility of a takeover of the London
Stock Exchange by NASDAQ, which already owns twenty-five percent
and is no longer barred from increasing that stake, and anxiety at the
prospect of rules driven by Sarbanes-Oxley regulating the London Stock
Exchange played a major part in this.57 The FSA welcomed this move
by government to create a legal ring fence and ensure that London
continues to enjoy the competitive advantage it derives from domestic
Equally, we welcome and are hugely encouraged by the SEC’s
pledge at the end of last month not to apply U.S. rules to European
exchanges that are taken over by American exchanges.58 This is a
testament to the open and constructive dialogue between the SEC and
the FSA on matters of mutual interest.
Now, at this stage you might be forgiven for wondering when or
whether I’ll get around to talking about enforcement. After all, I am the
FSA’s Director of Enforcement.
So where does enforcement fit into this picture? Well, a clue lies in
the fact that my team of approximately 288 people represents just eight
percent of the total staff of the FSA. Contrast this with the SEC, whose
Enforcement Division makes up just over half of the SEC’s total
The FSA is not an enforcement-led regulator. Enforcement is one
of a range of tools available to deal with noncompliant behavior, but it is
not the most widely used. It is used selectively and strategically as part
of our overall risk-based supervisory strategy and in support of the
Consistent with this, the Enforcement Division does not have its
own freestanding priorities. Our priorities are the same as those of the
FSA as a whole, and our work is driven by the needs of the rest of the
organization. Two big priority areas for the FSA, and therefore for the
Enforcement Division, are market abuse on the wholesale side and
treating customers fairly on the retail side.
A key focus in the FSA’s efforts to ensure the integrity of the
markets in the United Kingdom is to deter market abuse. An appropriate
enforcement action that sends out strong messages is a very important
part of achieving deterrence, but we generally regard non-enforcement
options—such as proactive surveillance of likely hot spots, up-to-date
transaction analysis systems, and industry cooperation to ensure a steady
flow of information—as more desirable. We take the view that
prevention is better than cure.
An interesting dimension to this priority is the role played by hedge
funds, a subject I flagged earlier, which is of much topical interest, of
course. Indeed, it is not possible to open a newspaper, either in London
or in New York, without reading about the latest issue concerning hedge
funds, be it in connection with the regulation of hedge funds or the
absence of it, the risk of the misuse of insider information by hedge
funds (witness the SEC’s investigation into the Movie Gallery case,
which was featured on the front page of yesterday’s New York Times60),
the well-publicized difficulties of Enron or the risks posed by an
industry that has become so dominant that it accounts for roughly half
the trading on the London and New York stock exchanges.61
It is important to emphasize that the FSA does not, and is not
seeking to, authorize and regulate the funds themselves, which are
outside our jurisdiction. Rather, we continue to believe that we can
mitigate the risks through our existing authority over hedge fund
managers and broker-dealers who provide prime brokerage services to
Of particular interest to us in the Enforcement Division is the FSA’s
belief that some hedge funds may be testing the boundaries of
acceptable practice with respect to insider trading and market
manipulation. In addition, given the payment of significant
commissions and close relations with counterparties, they may be
creating incentives for others to commit market abuse.
Characteristically, our main response has been on the surveillance
side, and we have recently devised metrics to measure the incidence of
unusual price movements in order to see if this belief is correct.
However, we have also used our enforcement powers against hedge
funds acting improperly on our markets, most notably in the GLG
60. Jenny Anderson, As Lenders Hedge Funds Draw Insider Scrutiny, N.Y. TIMES,
Oct. 16, 2006, at A1.
The FSA’s initiative aimed at treating customers fairly is a prime
example of the FSA’s strategic shift to more principles-based regulation.
The initiative is of great importance for retail financial markets in the
United Kingdom and is directed at improving the outcomes for
consumers in these markets. Through this work, we hope that the
industry will move to a position where consumers can be confident that
they are dealing with firms where the fair treatment of customers is
central to the corporate culture.
Although much of this work is done through supervision and
education, the treating-customers-fairly agenda is also keeping the
Enforcement Division very busy. As I hope is evident, in the United
Kingdom enforcement is a small part of the regulatory relationship. It is
used strategically for the most egregious cases and where necessary to
protect markets and consumers. We put great emphasis on the messages
sent out to the markets through careful selection of cases and leverage
off the publicity that they generate.
However, the potential impact of enforcement action is very
significant. My division generates more publicity, both good and bad,
for the organization than any other. Our enforcement outcomes play a
very significant role in educating the industry and consumers about
issues of concern and the FSA’s approach to them. They can also be a
very powerful way of changing behavior and achieving effective
deterrence more generally, which of course is what enforcement activity
is all about.
So what can the FSA do to enforce the provisions of FSMA, as well
as the principles and rules we issue under that Act? Well, we are able to
prosecute insider dealing and market abuse in the criminal courts, as
well as breaches of the perimeter when people conduct regulated
activities without authorization.63 I should just say that when we bring
those actions in the criminal courts, we are the prosecutor; we don’t
need to refer cases to any other prosecuting body.64 We can also bring
cases in the civil courts to freeze assets and restrain unauthorized
behavior,65 but these kinds of cases are quite rare compared with the
cases that we bring through our own regulatory proceedings. Our own
procedures enable us to impose unlimited fines, to withdraw a person’s
or firm’s ability to conduct regulated activities, or even to prohibit them
from the industry altogether.66
There are a variety of reasons for regulatory cases making up such a
large majority of our cases, but I see the main reasons as being: the
greater scope they offer for establishing breaches; the lower evidentiary
standards that apply and the consequent lower—but not low, I hasten to
add—litigation risks they involve; and the greater prospects of
settlement that they hold out.
The FSA actively looks for new ways to make sure its penalties
bring about the deterrent effect that the FSA wants to achieve. This
means considering not only the types and levels of penalties that the
FSA imposes, but making sure that the penalties affect the right people.
It also means acting with confidence and resolutely taking enforcement
action where appropriate to convince wrongdoers that there is a real risk
that they will be caught and proceeded against. Sometimes it means
taking important cases, recognizing that they will be difficult to fight
and that we may not win.
The Enforcement Division also supports the FSA’s strategic shift to
more principles-based regulation. Where appropriate, the FSA can and
does take enforcement action on the basis of principles alone, and this
trend will grow.
Now, I did promise at the beginning of this speech that I’d
acknowledge that there are some things that we in the United Kingdom
and we at the FSA might be considered to do less well and where we
might learn from the way you do things here in the United States.
It is clear to me that the authorities in the United States, particularly
in recent years, have been very successful in prosecuting major
corporate scandals,67 and in doing so recognizing that those at the heart
of those scandals are criminals and deserve to be brought to justice.
Eliot Spitzer’s efforts here in New York, of course, are particularly
well-known. But they are only part of the picture. I know that the SEC
and the Department of Justice have also obtained criminal convictions in
a number of insider trading cases, some indeed involving hedge funds.68
With the SEC’s head of enforcement giving testimony before the Senate
Committee on the Judiciary only a few weeks ago,69 it is clearly a matter
that is very much in the spotlight.
In the United Kingdom, we have the Serious Fraud Office, whose
sole role it is to investigate and prosecute serious and complex fraud,
and who conclude in the region of about ten such trials a year.70
As far as the FSA is concerned, we have successfully brought a
number of prosecutions against people who have acted without
appropriate authorization. But we have only used our prosecutorial
powers against someone who has committed an offense in our markets
once, and that was last year, when we successfully prosecuted directors
of the AIT Group for criminal market abuse by making false and
misleading statements to the market.71
While some notable victories have been achieved in the United
Kingdom—for example, the City Slickers72 prosecution by our
Department of Trade and Industry, and convictions arising from the
Guinness trials73—overall, successful prosecutions of so-called
whitecollar criminals are sparse.
Now, it seems to me there are clearly some cultural and
environmental differences between our two countries, which perhaps, in
part at least, explain our different appetite for prosecution of major
corporate and financial scandals.
First, for the last ten years or so, after the scandals of the early
1990s—which I was intimately concerned with as a lawyer trying to sort
them out, I hasten to add, most notably the BCCI74 and Maxwell75
pension fund matters—we’ve been enjoying a relatively quiet time on
this front, perhaps because our economy has generally been so buoyant.
Second, looking across from my side of the Atlantic, there appears
to be greater public support in the United States than there is in the
United Kingdom for seeing alleged corporate fraudsters and financial
wrongdoings prosecuted in the criminal courts. And, indeed, there
seems to be a greater willingness of juries to convict.
Third—and I hope this bit isn’t too controversial—if my
understanding of arrangements in the United States is correct, district
attorneys are elected in most districts and attorneys general are elected
in most states. These posts are used by many as a springboard for a
career in mainstream politics. Well, although many lawyers in the
United Kingdom do end up in politics—our Prime Minister, Mr. Blair,
for example—the vast majority of them come from private practice
rather than from the Crown Prosecution Service. The link between
political office and prosecution is not a well-established one. A proven
track record in prosecuting white-collar crime clearly has a much greater
positive impact on a prosecutor’s current and future career in the United
States than it does in the United Kingdom.
Finally, plea bargaining and the giving of state’s evidence by
accomplices. In the United Kingdom, we call this giving Queen’s
evidence. This is a practice that is explicitly recognized in U.S. criminal
practice, and as such is a very valuable tool for obtaining convictions of
all manner of offenders. By contrast, it is not a practice that is formally
recognized in our system and is not one of which our legal establishment
has traditionally approved.
Over 350 years ago, Chief Justice Hale expressed his distaste for
pleas of approvement. That was the term used at the time for granting
immunity from prosecution to accomplices willing to give evidence to
the Crown. He said: “The truth is that more mischief hath come to good
men by these kinds of approvements, by false accusations of desperate
villains, than benefit to the public by the discovery and convicting of
real offenders.”76 How much sympathy would that view find, I wonder,
in the United States?
74. R v Inst. of Chartered Accountants,  B.C.C. 736 (Eng.).
75. MGN Pension Trs. Ltd. v. Bank of Am. Nat’l Trust and Savings Ass’n, 
2 A.I.I. E.R. 355 (Ch.) (Eng.).
76. 2 Sir Matthew Hale, History of the Pleas of the Crown 161 (1736).
But as I said earlier, the FSA has very wide responsibilities and
limited resources and we take a risk-based approach to applying our
resources in enforcement cases. From a risk-based perspective, we often
feel it is a better use for our scarce enforcement resource to seek a
quicker and less uncertain regulatory outcome.
It is not as if the consequences of our own administrative regulatory
proceedings are not serious. As I said earlier, we ban people from the
industry, for life if necessary, and we have unlimited fining powers.
Nevertheless, we have stated publicly that, despite the well-documented
difficulties of criminal prosecutions, some of which the SEC’s Head of
Enforcement outlined in her recent testimony on Capitol Hill, there are
some cases where this route is the appropriate course, and we expect to
bring more criminal prosecutions going forward.
So, to conclude, I propose to you, ladies and gentlemen, that
nobody does it better than the FSA. I believe that our light-touch
approach to regulation, with its growing emphasis on principles, backed
up by bold and strategic enforcement action, is highly effective. I would
point to London’s current success on the global stage as irrefutable
evidence of this. But we also know that we are not perfect. This is a
very competitive world, and we don’t intend to rest on our laurels.
Now, thankfully for me, because this isn’t a debate, I am very
relieved that my proposition will not be tested here tonight by a vote.
Thank you very much. Now for the difficult part, I’d be delighted
to take some questions, especially easy ones.
QUESTION: As the United Kingdom becomes more integrated
with the European Union, and when—perhaps I should say if—the
United Kingdom were to ever accept the Euro, where do you see the
FSA in terms of its evolution into a Brussels-type regulatory
MS. COLE: When I talk about moving to more principles-based
regulation, of course we can’t ditch the rulebook. I mean it is very much
a philosophy that we hope will move regulation and behavior in the right
direction. One of the big reasons why we are clearly going to have
trouble ditching the rulebook is because most of the new rules that we
have to address come from Europe. So you are very right to make the
point. It is a very significant issue for us.
Whenever we have to look at the implementation of a new
Directive, as we do with some degree of regularity, we look very
carefully at what we need to bring in, how far we can go to satisfy the
Directive without going any further. It really is, as you point out, a very
significant issue, in terms of what we want for our philosophy going
In terms of Europe more generally, I would say from time to time
there is talk of a single European regulator for financial services.
Clearly, if there were to be such, we would want to be it. Or would we?
I don’t know. Generally, I think we have lobbied behind the scenes to
ensure that no such circumstance ever comes about.
I don’t know other than that. I can’t say where we’ll be in terms of
integrating further into Europe. I can’t see any prospect of our losing
our currency on the horizon, for example. But it is a very pertinent
QUESTION: What’s your take on all of the corporate scandals that
have been experienced over here? What is the reaction of people
overseas to that?
MS. COLE: One of the points that I was seeking to make is that we
try very often not to rush to a knee-jerk reaction of more regulation
when something goes wrong. There is a powerful head of steam that
gets up in that direction when you have, obviously, a scandal, or some
“mis-selling,” as we say, for example, as we have had in the United
Kingdom. But we do try to focus on market solutions and such things
I was talking before I came in this evening about, in terms of this
issue of prosecution of corporate scandals, how we in the United
Kingdom, I think, seem to be about twenty years behind you here,
because—if I understood this correctly—the prosecutions of some of the
financial and corporate scandals really got going in about the mid-1980s.
So I am very intrigued to see, because, generally, whatever happens over
here we eventually catch up. Whether we will go in the same direction I
The criminal prosecutions by a securities regulator really require
huge and significant resources. We have this risk-based approach,
where we try to use finite resources to manage our cases in what we
consider the most appropriate way. So we are never likely to have the
resources to bring a lot of major prosecutions simultaneously.
I think the SEC, and also the fact that the DOJ is a separate
prosecuting body, just gives you the greater capacity to bring those sorts
QUESTION: Could you give us some examples of regulatory
responses, where you forgo an enforcement proceeding, how you
achieve the regulatory result?
MS. COLE: Yes. Quite a lot gets done through the supervision
angle. So cases sometimes don’t get referred to Enforcement; they get
dealt with by the supervisors of the firm. The majority of the activity
that we conduct—we have authorization, we have supervision, and we
have enforcement—but the majority of the FSA’s resources is in the
area of supervision.
So if there is on the retail side, for example, something where
customers have been badly affected, by mis-selling or something like
that, or they haven’t been treated fairly, it isn’t essential that the case
will come into Enforcement. It may be that the supervisors will agree on
a remediation program, for example, with the firm. That could also be
done in the enforcement context. But I talked about enforcement just
being one of the tools. The supervisors very often do agree on packages
with firms that mean that it is not necessary to go to Enforcement.
QUESTIONER: Is that public?
MS. COLE: Is it public that that happens? Yes, because the
remediation package very often can become public. But you’re right in
saying that it’s only when you have an enforcement outcome that we are
required by the statute to publish.77 So if the supervisors deal with an
issue with a firm, sometimes, very often, it won’t become public.
Sometimes it will. If we deal with an issue through the Enforcement
Division and we have a regulatory outcome, we are required to publish
QUESTION: I’m sort of interested in a question that would
compare and contrast what is expected of your agency with what’s
expected of the various levels of enforcement and prosecution in the
United States with this example. Let’s say somebody in some Midlands
city operating a firm that is not regulated—or authorized, in your
words—by your agency sells £40 or £50 million worth of investment
notes in an enterprise that is held out as being essentially an investment
vehicle into up-and-coming businesses. But, after a while, whatever the
initial intentions, it sort of degenerates into a Ponzi scheme, and the
proprietors essentially are driving around in big cars and buying big
houses, but not too much gets invested in companies, and so on and so
forth. It may be hundreds of people, or maybe a thousand people, are
77. See Delivering Better Regulatory Outcomes: Joint FSA and OFT Action Plan,
available at http://220.127.116.11/search?q=cache:bmGW5395a_0J:www.oft.gov.uk/
(last visited Jan. 11, 2007).
out £40 million.
Is it expected that your agency would lead the charge against that
type of operation, or would it be the Serious Fraud Office, or would it be
some other Crown office?
MS. COLE: We would be very likely to shut them down or injunct
them, for example, and take them out, and publicize the fact that we had
done so. What we wouldn’t be likely to be doing would be helping the
individuals pursue their private law rights, if I can put it that way.
As part of an enforcement outcome, we very often do agree on a
program of remediation, as I described it before, to give money back to
individuals. But in the case you’re describing, where we’re talking
about a completely non-authorized entity that’s probably going to run
away with the money, we wouldn’t be bringing cases against those
individuals for restitution of the funds. We could, but we rarely do it
that way. We would be focusing more on the bigger regulatory issue.
But we would shut it down.
Now, the Serious Fraud Office might bring a criminal prosecution if
the fraud was big enough, or the Crown Prosecution Service might in the
case of a smaller fraud. But in terms of criminal prosecutions, our remit
is in the area of market abuse and insider dealing or in the area of
removing unauthorized firms.
Maybe two more questions.
QUESTION: What is the relationship of your organization to the
Proceeds of Crime Act?78
MS. COLE: Well, as you heard, we have a statutory objective
around the subject of reducing financial crime, so we don’t have a direct
relation with the Proceeds of Crime Act. But, in connection with the
financial crime part of what we do, we do look at money-laundering
cases, for example, insofar as they fit into that overall objective, and we
might bring regulatory action in that area.
QUESTIONER: Where there are financial institutions that are a
part of it?
MS. COLE: Yes, indeed.
I think there was one more question.
QUESTION: You said that you don’t regulate hedge funds but you
do regulate their advisors.
MS. COLE: Yes.
QUESTIONER: In the States, the debate is whether we should
Proceeds of Crime Act, 2002 c. 29 (Eng.).
regulate hedge funds by regulating the advisors. Is there a class of
advisors to hedge funds that is not under supervision in the United
MS. COLE: I don’t think so. Off the top of my head, I don’t know
any. I know you are having quite a significant debate about that. I’ve
also read about a legal case where the decision of the SEC to do it in
some particular way was overturned?79 So I know there is quite a lot
At the moment—and who knows what’s going to happen next—we
are very much steering away from authorizing or regulating hedge
PROF. FISCH: Please join me in thanking Margaret Cole. And let
me invite you all to the reception outside.
5. See Leiter's Law School Rankings, as measured by “Faculty Quality in Specialty Areas ,” available at http://www.leiterrankings.com/faculty/2003faculty_ businesslaw.shtml.
6. Sean J . Griffith is an Associate Professor of Law at Fordham University School of Law.
7. Richard C. Squire is an Associate Professor of Law at Fordham University School of Law.
8. For more information, please visit the Fordham Journal of Corporate & Financial Law website , http://law.fordham.edu/publications/index.ihtml? pubid=600 (last visited February , 22 2007 ).
9. See Arthur Anderson LLP v. U.S., 544 U.S. 696 , 704 ( 2005 ).
10. For more information, please visit the Fordham Center for Corporate, Securities & Financial Law website , http://www.fordham.edu/law/faculty/fisch/source. html (last visited Jan . 23 , 2007 ).
11. John F.X. Peloso is senior counsel at Morgan, Lewis & Bockius and an Adjunct Professor of Law at Fordham University School of Law.
12. Constantine N. Katsoris is the Wilkinson Professor of Law at Fordham University School of Law.
20. For more information, please visit the SEC Historical Society website , http://www.sechistorical. org (last visited Jan . 31 , 2007 ).
21. Sarbanes-Oxley Act of 2002 , 107 P.L. 204 , 116 Stat . 745 ( 2002 ).
22. The Fifth Annual Albert A. DeStefano Lecture on Corporate, Securities & Financial Law , 11 Fordham J. Corp. & Fin . L. 1 ( 2005 ).
23. The Sixth Annual A.A. Sommer , Jr. Lecture on Corporate, Securities and Financial Law , 11 Fordham J. Corp. & Fin . L. 697 ( 2006 ).
26. Financial Services and Markets Act , 2000 , c. 8, § 1 (U.K.).
27. See Introduction to the Financial Services Authority at 3 , available at http:// www.fsa.gov.uk/pubs/other/fsa_intro. pdf (last visited February 22 , 2007 ) [hereinafter FSA Introduction] .
28. Id . at 15.
29. Financial Services and Markets Act , 2000 , c. 8, § 1 (U.K.).
30. For more information, please visit the Center for Effective Dispute Resolution website , http://www.cedr.co. uk (last visited Jan . 23 , 2007 ).
31. For more information, please visit the Alternative Dispute Resolution Group website , http://www.adrgroup.co. uk (last visited Jan . 23 , 2007 ). Conference (Oct. 11 , 2006 ), available at http://www.fsa.gov.uk/pages/Library/ Communication/Speeches/2006/1011_jt. shtml (last visited Jan . 20 , 2007 ).
36. See FSA Introduction, supra note 27, at 18.
37. For more information, please visit the Bank of England website , http://www.bankofengland.co. uk (last visited Nov. 6 , 2006 ).
38. See FSA Opens the Doors to Mortgage and General Insurance Firms (Nov . 3, 2003 ) http://www.fsa.gov.uk/Pages/Library/Communication/PR/ 2003 /117.shtml (last visited Feb . 22 , 2007 ).
39. Gross Domestic Product. See Vernon Everitt, Director of Retail Themes, FSA, The FSA's Regulatory Approach and Raising Financial Capability Through the Workplace , Speech at CBI, Executive Lunch , Birmingham (Sept. 14 , 2006 ), available at http://www.fsa.gov.uk/pages/Library/Communication/Speeches/2006/0914_ve. shtml (last visited Nov. 5 , 2006 ); see also National Statistics, available at http://www.statistics.gov.uk/CCI/nugget.asp?ID= 6 (last visited Nov. 5 , 2006 ).
40. See Facts and Figures, http://www.fsa.gov.uk/Pages/About/Media/Facts/ index. shtml (last visited Feb . 22 , 2007 ) [hereinafter Facts].
41. Financial Services and Markets Act , 2000 , c. 8, § 1 (U.K.).
42. Id .
43. Id .
44. See Facts, supra note 40.
45. See John Tiner & John Fingleton, Office of Fair Trading and FSA , Delivering Better Regulatory Outcomes , A Joint FSA and OFT Action Plan ( April 2006 ), available at http://www.fsa.gov.uk/pubs/other/OFT_FSA_Actionplan. pdf (last visited Nov. 6 , 2006 ).
46. See John Tiner, Chief Executive, FSA , Chief Executive's Report, Annual Report 2005 /06, available at http://www.fsa.gov.uk/pubs/annual/ar05_06/ar05_ 06 . pdf (last visited Nov. 6 , 2006 ).
48. THE NEW INTERNATIONAL DICTIONARY OF QUOTATIONS 281 (1st ed. 1986 ).
49. See London Stock Exchange, Investment News, With-Profit Insurers Show Strong Capital Strength (July 4, 2005 ), available at http://www.londonstockexchange. com/en-gb/pricesnews/investnews/article.htm? ArticleID=16087757 (last visited Nov. 6 2006 ).
50. For the most recent information supporting these figures, see LSE Success Prompts New York Fight Back, AFX INTERNATIONAL FOCUS , Sept . 24 , 2006 , available at http://www.finanznachrichten.de/nachrichten-2006-09/artikel-7035593.asp (last visited Jan . 12 , 2007 ).
51. See Ian Bailey, Beginning Life as a UK-Listed Company,
57. See Exchange Chief Warns of Merger Manipulation, CANBERRA TIMES , Oct. 14 , 2006 and Chris Noon , Greifeld's NASDAQ Ups LSE Stake Again , FORBES, May 19 , 2006 .
58. Norma Cohen , U.S. and E.C. Reassure on Local Rules Stock Exchanges , FINANCIAL TIMES , Sept . 28 , 2006 , at 27.
59. See The Investor's Advocate: How the SEC Protects Investors , Maintains Market Integrity, and Facilitates Capital Formation, http://www.sec.gov/about/ whatwedo. shtml (last visited Feb . 22 , 2007 ) (noting the staff of the SEC is 3 ,100).
62. Jabre v. Financial Services Authority,  F. S.M.T. (U.K.).
63. Financial Services and Markets Act , 2000 , c. 8, §§ 401 - 02 (U.K.).
64. Contra David R. Chase & Neal Wilson, When the SEC Comes Knocking, BUS . LAW TODAY, May/June 2000, available at http://www.abanet.org/buslaw/blt/blt00maysec.html (last visited Nov. 6 , 2006 ) (discussing how the SEC must refer prosecutions to the DOJ) .
65. See Financial Services Authority Enforcement in the Civil and Criminal Court, available at http://www.fsa.gov.uk/Pages/doing/regulated/law/focus/courts. shtml (last visited Nov . 13 , 2006 ).
66. See Joint Committee on Financial Services and Markets, Second Report , 1999 - 9 , at 8-17, available at http://www.parliament. the-stationery-office .co.uk/pa/jt199899/ jtselect/jtfinser/465/46502.htm (last visited Jan . 15 , 2007 ).
67. Christopher Wray , Prosecuting Corporate Crimes, eJournal USA: Economic Perspectives, Feb. 2005 , available at http://usinfo.state.gov/journals/ites/0205/ijee/ wray. htm (last visited Jan . 12 , 2007 ).
68. See , e.g., U.S. v. Pollet, 05 Cr. 287 (E.D.N .Y. April 26, 2005 ).
69. Testimony Concerning Insider Trading before the Senate Comm. on the Judiciary, ( Oct. 5 , 2006 ) (statement of Linda Chatman Thomsen, Director, SEC Div . of Enforcement), available at http://www.sec.gov/news/testimony/2006/ts120506lct.pdf (last visited Jan . 10 , 2007 ).
70. See FSA Introduction, supra note 27, at 22.
71. Press Release, Financial Services Authority, FSA Secures Convictions in First Criminal Market Abuse Case (Aug. 18 , 2005 ), available at http://www.fsa. gov.uk/pages/Library/Communication/PR/ 2005 /091.shtml (last visited Jan . 15 , 2007 ).
72. R v Hipwell,  E.W.C.A. (Crim.) 736 (Eng.) ; see also James Daley, The 'Mirror' Shares Scandal: City Slickers Found Guilty , THE INDEPENDENT, Dec. 8 , 2005 .
73. R v Saunders,  1 Crim. App. Rep . 463 (Eng.).