Oct 29 2012

Why the UK doesn’t want to prosecute financial crimes

Posted by: Nick Shaxson in: Thoughts

From the blog of Rowan Bosworth-Davies, a former UK detective and legal consultant advising financial institutions:

I have never tried to disguise my contempt for the way in which the lead regulator has consistently failed to use their prosecutorial powers to bring actions against financial criminals.
. . .
Criminalising the bastards is the only way to take them down, and exclude them from the financial sector. It is a solution whose time came of age a long time ago, and I don’t know what is stopping it being used aggressively, remorselessly and with maximum prejudice.
. . .
The FSA has routinely ignored the responsibility given to it by Parliament

And among several answers he says, with penetrating insight,

“I think it is a class issue.”

Indeed. If you are a grubby housebreaker, you meet the full force of the law. If you are a criminally-inclinded City grandee, you are in the clear. He describes the old revolving door factor, and produces some pretty unveiled comments from insiders about how they don’t want to prosecute financial crime.

This blog is full of fascinating anecdotes, such as this one:

“I was once approached at a public conference by a young German woman who asked me if she could have a copy of my paper which I had just presented.  I asked her why she wanted it and she told me that she had been seconded to the FSA from Goldman Sachs for a year’s sabbatical. The FSA had entrusted her with formulating their Financial Crime policy, but knowing nothing about financial crime, she was going to every conference she could find and blagging copies of papers she had listened to which she thought might be useful to her.

I rang her manager and suggested that the FSA hire me for a couple of weeks to come in and teach this young woman what she needed to know about financial crime so that she could make a genuinely valid contribution to the debate. His answer was interesting. He said;

‘…Why on earth would be bother to consult you? If we need any low-level consulting of this kind we can get it all for free from one of the Big 4 consulting firms. They do it for nothing for us because they like to be privy to our thinking…'”

Read the whole blog. It’s devastating. This goes a long way towards explaining why the City of London is as big and powerful as it is.

5 comments so far

La Chupacabra 10th October, 2012 1.54 pm

Can you provide some examples of financial crimes that the FSA has actually failed to prosecute? I can think of lots of instances of questionable behaviours within the industry, but very few that would actually fit the statutory definition of a crime.


Nick Shaxson 10st October, 2012 8.24 am

I suggest your logic is this: if it hasn’t been prosecuted, then it isn’t a crime. Kind of tautological. To save myself and you a lot of time, I suggest you read, for example, this. http://rowans-blog.blogspot.ch/ or this http://bit.ly/SvaKnz or . . .

La Chupacabra 10st October, 2012 8.16 pm

I understand your and Rowan’s point that the FSA has failed to prosecute financial crimes, without detailing what those are.

So the question remains: what are examples of bankers’ actions (or absence thereof) that you would consider a crime, and in breach of what law?

Nick Shaxson 11nd November, 2012 8.37 am

you are just trying to waste my time now

Hawkeye 11th November, 2012 2.27 pm

La Chupacabra

The website of Rowan Bosworth-Davies (a former Fraud Squad detective) outlines the type of conduct and the respective laws that appear to have been broken:


These mainly relate to the Fraud Act 2006 and The Theft Act 1968.

Neither the FSA or the BoE appear to employ detectives or criminal lawyers to fully investigate such frauds.

As Mr Shaxson implies, lack of prosecution is not proof positive of lack of evidence of wide scale fraud.

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