According to the FSA, which imposed the £7.2 million fine for “inadvertently engaging in market abuse in connection with trading of Punch Taverns…the market abuse was not deliberate or reckless. Mr. Einhorn did not believe that the information that he had received was inside information and he did not intend to commit market abuse.” Sayeth Einhorn: Read more »
FSA To Require Firms To Record Employees’ Phone Calls Despite It Being A Waste Of Money That Enterprising Insider Traders Will Undoubtedly Work AroundBy Bess Levin
The Financial Services Authority announced today that “relevant communications made with, sent from or received on mobile phones and other handheld devices must be recorded and stored for six months.” The new rule is expected to cost banks at least 10,000 pounds ($16,000) per phone, per year, which they are none too pleased about, especially given the pointlessness of the exercise. Is the UK regulator aware of the fact that if someone wants to insider trade, they’re gonna find a way, regardless of their work phone being tapped (like, for instance, using a personal phone or meeting in person to trade hot tips) and that the only thing they’re going to determine from these calls is which banks employ the highest number of bondage and clown fetishists? Yes, and they don’t care. Read more »
The banks that stayed afloat with billions in government bailout money are laughing, well, all the way to the bank. And Britain’s top financial services regulator says that’s got to change.
“There remains, I believe, an absence of the acceptance of collective responsibility for what has happened,” Hector Sants of the Financial Services Authority opines today. “I personally remain unconvinced that all senior management have taken on board the need to change and operate in a genuinely different manner.”
Well, why would they? Governments on both sides of the Atlantic have handed out the billions with nary a string attached. And they’ve continued to do so even as banks continue to behave badly.
This will make a simply outstanding race for the bottom study some day some years from now. Dueling regulators, burning to impose salary caps of the like that would trigger severe, acute male pattern baldness in Erin Callan, but restrained by the sinister hand of Regulation No 1612/68 as thousands pour out of the latest salary cap obsessed jurisdiction towards countries where the average level of economic understanding actually cracks the fifth grade ceiling. Sayeth the evil 1612/68:
…mobility of labour within the Community must be one of the means by which the worker is guaranteed the possibility of improving his living and working conditions and promoting his social advancement.
Quitters never win, you capitalist expatriates! We hope you enjoy your time as a stateless drifter, and die poor and without a penny left in your unearned family estate’s coffers too. (Can we have your car?)
It is the same old argument. The key objection from banks to a new code from the U.K. Financial Services Authority on bonuses is that it will harm competitiveness, as jobs and tax revenues move to friendlier climates. The argument risks watering down regulatory responses to the recent crisis, as banks grow more confident they are out of danger.
The line has held some sway at the FSA, disappointing those hoping for a stronger stance on pay. Detailed provisions on deferring a significant portion of bonuses and linking the deferred component to firmwide performance now will apply only to senior bankers, rather than everyone. Banks will still be able to pay bonuses if they rack up losses. The FSA argues it is sticking to its guns and that it is determined to enforce these rules.
Yes, we must impose pay caps on every financial center in the known universe.
An Allied Force Is Needed for Bankers’ Pay [The Wall Street Journal]
Full Disclosure: Dealbreaker is long popcorn.