The only way to meet the future challenge of a robust, proactive and interventionist FSA enforcement regime is to provide clients with skilled, expert and informed advice from the earliest stage.

YOUR CLIENTS ARE IN THE FIRING LINE
The wide powers to fine, suspend or prohibit from trading, and to prosecute, with the possibility of long prison sentences, means that 2 Bedford Row should be an integral part of your team.

The 2 Bedford Row Financial Services Team provides comprehensive advice and advocacy in relation to investigation and enforcement under the Financial Services and Markets Act 2000 regime.

The 2 Bedford Row financial services regulatory practice offers specialist knowledge and unrivalled experience gained in fraud, S.F.O., D.T.I. Inland Revenue and H.M. Customs and Excise investigations, prosecutions and appeals. These qualities and attributes are at our clients’ disposal before, during and after investigations, tribunals and/or appeals. We bring expert advice as to the best approach to FSA investigations, and much-lauded advocacy-skills to proceedings - both in the courts and before the tribunals of first instance and appeal.

Expert knowledge and experience of regulatory/fraud related issues
That expertise and experience includes:-

• Challenging the lawfulness of, for instance, the seizure of documents by warrant;
• Defining, by way of legal challenge, the limits of an investigating authorities’ powers;
• Responding to the legality of evidence obtained from other jurisdictions, and defining an investigating authority’s power to obtain material on behalf of a foreign government;
• Determining the appropriate response by a suspect company or its directors and/or employees to investigations by the authorities;
• Preparing prospective interviewees for interview by the authorities;
• Advising in relation to interviews (whether compulsory, voluntary or under caution) as to what use may be made of any answers to questions put at subsequent proceedings;
• Obtaining and presenting evidence for trial;
• Outstanding advocacy at trials and appeals.

The FSA’s more robust approach
It is now thought that the FSA intends to flex its muscles and aggressively to pursue, through all the statutory powers available to it, its regulatory and enforcement role. This will include far-reaching investigations, seizure of documents, questioning of witnesses and fault finding exercises – whether by tribunal or otherwise. A substantial increase in the number of cases to be heard before the tribunal and on appeal is widely anticipated

It is apparent from contacts with the FSA that they expect to exercise a more robust approach and understand that they must ready themselves for a much more adversarial response from those under investigation. The FSA too, are turning to experienced fraud practitioners like ourselves in order to meet their perceived future challenges.

The 2 Bedford Row service
We provide a service to assist responding to and or defending such enquiries and disputes. Uniquely, our experience of prosecuting and, particularly, defending frauds over the years allows us:

• to provide informed and insightful advice on the likely course of an investigation conducted by the FSA;
• to provide expert advice on the powers of the FSA;
• to provide expert advice on the nature and consequences of
interviews – whether voluntary, compulsory or under PACE 1984 caution – within the investigation or any subsequent proceedings;
• to provide unrivalled advocacy at tribunals and appeals – whether testing the FSA evidence and witnesses, or the best approach to the presentation of the defence case.

Meeting the Challenge of the Future

• We offer precisely the experience, expertise and advocacy required to conduct internal investigations, and to defend and/or respond to complaints made by the FSA (whether before the tribunals or otherwise) in a way that few other practitioners can. Indeed, the professional skills now required are not (on the whole) to be found within those sets of chambers traditionally associated with financial regulatory work.
• You must instruct the right team at the earliest stage of proceedings – in order that a "joined-up" approach can be taken to an investigation and any FSA penalty or criminal proceeding.
• It is essential from the outset to have in mind the relevant rules of evidence and procedure of all the possible venues before which the FSA may choose to pursue the client.Taking a wrong decision at these early stages may well cost your clients dear at the end of a trial.

To contact the FSA team, please call John Grimmer (Senior Clerk)
on 020 7440 8888 or email clerks@2bedfordrow.co.uk

As the FSA finds its feet we have observed how its approach to enforcement has toughened - no doubt influenced and emboldened by the conduct of the SEC in the United States. The following quotations illustrate a perceived hardening in the enforcement regime. We confidently expect this robust trend to continue.

Both in relation to breaches of market/industry rules and money laundering regulations, the going just got tougher.

"…we are only one of many agencies and interests involved in the fight against fraud. Others include government, law enforcement agencies and the industry.…We will develop our relationships and partnerships with the other stake holders to help us make the most effective contribution to the UK fight against fraud and to help improve the overall regime itself"
Chief Executive’s Plan,
FSA Business Plan 2004/05

"The City should be able to take some encouragement from the Financial Services Authority's publication yesterday of its business plan…it is budgeting £5m, up from £4.2m this year, for enforcement action in areas such as split-capital investment trusts and market abuse. So, rather less encouraging news for miscreants"
Financial Times
January 2004

"We will not tolerate individuals using a position of trust for their own personal financial gain”

"Fiddling the figures reported to the FSA, or those declared in company accounts, has the potential to undermine regulation and destroy confidence in markets. This is why we think that only the very strongest of the sanctions available to us is appropriate in these circumstances."
Andrew Proctor, Head of Enforcement, FSA
February2004

"NATIONAL NEWS: FSA starts first criminal market abuse prosecution
The City regulator flexed its new legal muscles yesterday when it launched its first criminal prosecution for market abuse…"
By Nikki Tait and Jane Croft
Financial Times; Feb 11, 2004

"THERE'S NOW MORE BITE TO THE FSA'S BARK
In 2002 the FSA concluded 30 public enforcement actions. In 2003 that figure rose to 53. In 2004 it already stands at 25. Moreover, there is a marked upward trend in the level of penalties-UK regulatory fines against financial institutions used to be denominated in hundreds of thousands of pounds whereas headlinegrabbing multimillion-pound penalties now seem common. There can be little doubt that the FSA is establishing a tougher enforcement environment…"
Martyn Hopper
The Times, April 27, 2004

Articles
The Financial Services Authority:Investigation and Enforcement - An Overview (24 May 2005)