Sunday, Jun 06, 2010
The Dawn of the Financial Dead
Observer: Equitable boss free to make City comeback
Another indispensable financial value-creator arises from the grave to suck our blood. Pass the wooden stake someone.
Posted by letthemfall @ 01:14 PM (586 views) Add Comment
12 Comments
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1. techieman said...
Live and let live LTF, or is it Live and Let die? Not the best time for him to punt his CV is it though? Will be interesting to see if the old school tie works as well in the City as it did for Mandy.... or is it just a different time rather than different people?
And when is that fat bloke from the independent (Bright) due to come out of clink?
Either way they will have both paid their dues..... wouldnt they?
2. letthemfall said...
Hi techieman
I can let him live, but I imagine for most of us a mistake/misdemeanour of that magnitude would leave us jobless and poor, whereas no doubt he has plenty of money and good prospects, notwithstanding 6-year bans.
3. jack c said...
Guy's have a read of this from a very recent FT publication dated 03/06/2010 titled - Industry life ban from FSA does not stop you working
An individual banned from working in financial services by the FSA can still apply for a job in financial services and work again, the regulator has admitted.
Although the prohibition on is for life - that is, the ban will sit on their record for the rest of their life - this does not mean that financial services companies will not take them on.
The revelation came as the FSA announced its ban on John White, former settlements manager for Seymour Pierce, from working in financial services for committing fraud.
Between 2001 and 2006, White stole a total of £152,372 from his then employer and a number of its private clients in 37 separate transactions, and hid £145,000 in a dormant account that had been paid to Seymour Pierce in error.
He also transferred a personal trading loss into a Seymour Pierce account and stole trading profits, dealing commission and credit interest belonging to his employer.
Last year, the FSA fined Seymour Pierce £154,000 for failing to establish effective controls to prevent this fraud.
Margaret Cole, enforcement officer for the FSA, said: "We are committed to deterring behaviour of this kind by punishing anyone found to have committed such misconduct."
However, when pressed as to what the terms of the ban mean, a spokesman said: "It is a lifetime ban that sits on their record for the rest of their life. However, it is possible that they could work again in financial services, depending on the person who is hiring them.
"It is inconceivable that anyone would want to take such a person on, but [saying that they can never work again in the industry] is not black and white."
This means the ban is only as effective as a prospective employer wishes it to be; it is possible for employers to overlook the ban and still hire that person.
SOURCE - www.ftadviser.com/FinancialAdviser/Regulation/News/article/20100527/7b89f3be-67e1-11df-90cb-00144f2af8e8/Industry-life-ban-from-FSA-does-not-stop-you-working.jsp
4. techieman said...
LTF, I have no idea of his personal wealth or lack of it. I just think if people pay their dues then thats the end of it a la Rehabilitation of offenders. Whether or not a life time ban or a 6 year or whatever ban is warranted is another argument. Personally for some crimes i think the key should be thrown away, but if society disagrees with that then fine. what i dont agree with is to keep punishing people past their sentence. I am surprised that you would argue against that.
5. cyril said...
They don't let sex offenders work with children do they? I don't mind him getting another job, but not in financial services please.
6. paul said...
what i dont agree with is to keep punishing people past their sentence. I am surprised that you would argue against that.
Yes, but he never served any time for fraud. being banned from ever working again in financial services would be a strong deterrent and encourage the financial services to clean up their act which in turn would mean that the FSA's role would become less necess ...
oh, I see.
7. techieman said...
so paul now YOU are judge and jury? Like i said the punishment is what it is ... you are not in position of all the facts. I love all these amateur judges who read a bit of slanted press and then think they know about the case.
Read the final notice http://www.fsa.gov.uk/pubs/final/headdon_1jun04.pdf... then decide. The FSA under FSMA have huge powers, they have an enforcement manual which im sure you could take a look at if your interested. But they have to be proportionate.
8. letthemfall said...
techieman
Perhaps it's a question of whether the punishment fits the crime. The damage wreaked by this individual has profoundly affected the lives of many and will continue to do so. Many pensioners died with much reduced incomes, which no future redress (if it ever comes) will correct. Same with other financiers - they really have not paid for their errors the way most of us would - Goodwin for instance. I think it almost certain that this EL character is very wealthy despite what he did.
This is all reminiscent of 200 years ago, when the poor were hung for minor crimes, whereas the rich and powerful had the means to escape such draconian punishments. This is today's analogue.
9. techieman said...
The "crime" was that he tried to rob peter to pay paul. The real problem was the "guarantee" in a falling market. That was unsustainable. What he tried to do was secure some balance sheet support with a reinsurance asset.
Of course had it done the trick he would have benefited but so too (and more so) would the people who you champion.
Its easy to apportion blame but desperate times require desperate measures. Thats probably why the punishment was "lenient".
Its not the same as Fred!
10. letthemfall said...
I thought the crime was non-disclosure of EL actions that breached regulatory requirements - not to mention the dodgy decisions that landed EL in the situation with guarantees. His desperation was the result of his own mess.
11. techieman said...
LTF - I will bow to your obvious superior knowledge on these issues. All i can say is it strikes me that in many occasions these kind of things have come off and people have been none the wiser, and infact better off because of them. Sometimes people do bad things for the overall good. Its not black and white - even privately the regulators will tell you that.
My recollection was that the "dodgy decisions" were the guarantees which could not be sustained - which i believe were drawn up years before his tenure (but that might be wrong and it may have been to try to secure a competitive advantage). Rather than policyholders biting the bullet with a commercial decision to accept x% now - with perhaps the rest in years to come, the decision (and to be fair i think that may have been with the HoL) was that the guarantees HAD to be honoured with the result that EL was doomed. The result now is that the policyholders are left high and dry, and are trying to sue the regulator and everyone else.
Sort of turkeys voting for Christmas... a bit like (some would say) BA cabin crew (disregarding the legitamacy of their claims) striking. If they keep going there will be no BA so you will end up with no jobs.
12. techieman said...
LTF
I apologise!
"20 September 2001 - Equitable publishes a compromise deal for policyholders.
It proposes that 70,000 guaranteed policyholders (GARs) should get a 17.5% increase in the value of their plans and sign away their guaranteed pension rights.
And the 415,000 policyholders, who are not GARs, are being offered a 2.5% increase on the value of their policies, but must sign away their rights to any legal claims."
"28 January 2002 - Equitable announces that its policyholders voted overwhelmingly in favour of the rescue package. 98% of the company's guaranteed policyholders backed the deal."