FCA Director Martin Wheatley too tough? Whose Porridge is Just Right?

George Osborne is still looking for just the right amount of toughness. As part of his Goldilocks routine he seems to have concurred with the city view that FCA Chief Executive Martin Wheatley, who stands down this weekend, was much too hard.

This seems a bit harsh on Wheatley, bearing in mind that Osborne declined to renew SFO Director Richard Alderman’s tenure in 2012 amid accusations that he was much too soft. Alderman thus joined a long list of senior staff in the public sector who left their posts in recent years when they were just too damned soft. Some were pushed, some jumped, and some did not have their terms renewed. Think Brodie Clark of the Border Agency, who fell foul of Teresa May or Cynthia Bower of the CQC.

Many of these appointments were made under New Labour who, in retrospect, do look very soft on regulation generally, and particularly so in relation to financial crime. George Osborne has repeatedly declared his intention to be far tougher on financial crime, but evidently that can go too far.

A tricky job for David Green, then, the current director of the SFO who took over from Alderman almost four years ago. He is thought to have done very well pulling the SFO back from the brink of self-immolation, as the number of dawn raids fell to zero, the conviction rate dropped, and companies were encouraged to investigate their own suspicious conduct (with the unsurprising result that many gave themselves a clean bill of health).

At a speech on Monday this week to the Cambridge Economic Symposium Green listed the achievements of the SFO, which has now ramped up the number of serious frauds it is investigating and has achieved some signal successes recently.

He also called for another very significant change in the law, adding his voice to the growing demand for companies to face a tougher criminal test “moving away from the identification principle of corporate criminal liability in English law and embracing something closer to vicarious liability, as in the USA”. Did he go too far for Osborne’s liking? Only time will tell.

 Let’s hope Green’s porridge is just right.

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