The UK’s Financial Services Authority (FSA) is likely to take an even tougher line and impose harsher penalties for market abuse especially following the record $92.6 million fine doled out to former Galleon Group hedge fund founder Raj Rajaratnam, it has been warned.
The FSA has faced criticism for its handling of white collar crime in recent years with detractors accusing the agency of lacking teeth. One lawyer said the FSA would certainly “take note” of the fine issued to Rajaratnam.
Consultancy firm The IMS Group agreed that the FSA was changing tack. “The SEC has historically adopted a rules-based approach to regulation whereas the FSA tended to adopt a principles-based approach. However, based on conversations with clients in London, I believe this is changing and the FSA is going to start adopting a US-style approach to market abuse enforcement following the Galleon case,” said Micah Taylor, managing director at IMS in New York.
“If that happens, I believe the British regulators will start imposing bigger fines and tougher penalties on firms that break the rules,” added Taylor….
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