The recent case of Rebekah Brooks (former editor of the News of the World) and the new enforcement regime of the FCA against senior management have generated the inevitable debate and comparison.
Before we consider the treatment of offences in the financial and media industries, we should ask ourselves whether we can even make valid comparisons between the two?
The alleged offences committed are very different in terms of their moral repugnancy or indeed their consequences. I will leave it to you to solve the moral conundrum of whether the hacking of a missing teenager’s phone (thus giving a family false hopes that she is still alive) are more repugnant acts than insufficiently supervising a bunch of bankers or traders (so allowing them to act negligently or in a wilfully dishonest way).
It is true to say though that the shutting down of the News of the World has had an infinitely lesser impact than say the failure of Lehman’s – in global economic terms anyway. Also as the Brooks trial attests that a criminal conviction is a very much harder thing to obtain than, say, an enforcement by the FCA.
Firstly the CPS has the considerable hurdle of having to convince a totally independent panel (i.e. a jury) of absolute guilt beyond reasonable doubt. If they fail that is the end of it and rightly so. The FCA need only convince themselves that in their view wrong has occurred. The accused enjoys very much reduced rights under the FCA’s scrutiny than they would in a criminal court. For example phone tap evidence may be used to incriminate them and evidence of seemingly unrelated activities or offences, conversations and actions dating back years can and is included.
Personally, I think if Rebekah Brooks had been the head of a financial services firm, she would have been fined heavily at the very least.