Financial watchdog targets bosses in war on market abuse

By Clara Ferreira-Marques

LONDON (Reuters) - The Financial Services Authority will increase its focus on high-profile managers and bosses in the battle against market abuse, even if it means cases may take longer to conclude, its head of enforcement said on Wednesday.

Long accused of not doing enough to tackle financial crime, the FSA will be following the example of its U.S. counterparts, whose big name scalps have included homemakers' guru Martha Stewart and press baron Conrad Black.

"You can expect to see more supervision and enforcement focus on individuals, especially significant influence function holders," said Margaret Cole, the FSA's director of enforcement.

She told an industry conference that the FSA had in the past looked at individuals for cases of dishonesty -- where the result is typically prohibition, or being scratched from the professional register -- but said it would now also consider competence and fines for those who breach the FSA's principles.

"We have made a strategic decision to investigate more individuals, so even though that could well mean that cases take longer and quick public outcomes are delayed, we consider this a price worth paying to obtain credible deterrence," she said.

Cole cited a study by consultants Deloitte for the Office of Fair Trading which found that going for individuals was a more successful deterrent than moves against firms.

The FSA last month fined both furniture retailer Land of Leather Holdings and its chief executive over improper sales of payment protection insurance -- an example of how it can pursue bosses, even when they are not directly responsible for the misdemeanours in question.

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