George Osborne has cranked up the pressure on the Financial Conduct Authority (FCA) in the wake of the FCA making damaging leaks to a newspaper about threatening a review of 30 million sold pensions and policies, which saw shares in the insurance sector nose dive. In a letter to the FCA Chairman, John Griffith-Jones, Mr Osborne stated that the events at the end of last week were “damaging both to the FCA as an institution and to UK’s reputation for regulatory stability and competence…” Mr Osborne also stated in his letter that the FCA’s review, which will be conducted by an external law firm, should as a starting point be that it “holds itself to at least as high standards it would expect of a listed company handling market-sensitive information, and should hold its own staff to the same standards it would expect of any approved person…” It has been suggested that the Chancellor was hinting that there should be disciplinary action taken against the FCA’s chief executive, Martin Wheatley, and also Clive Adamson, the FCA’s director of supervision, who allegedly leaked the information.
The law firm’s remit will presumably be to investigate the circumstances surrounding the information being passed to the newspaper and on conclusion of the investigation the FCA will need to determine whether there is a ‘case to answer’ warranting disciplinary action against any of the FCA’s employees. In cases of misconduct, the employer must carry out a reasonable investigation and the employee should be given an opportunity to respond to the allegations. Hopefully, the investigation will be thorough and the law firm will then be in a position to make recommendations.
Matt Gingell is a partner at our London offices. Matt specialises in employment law and advises executives and companies on a wide range of employment issues. Matt also regularly writes articles for external publication.