‘Now that the FSA chief executive has gone – its chairman should be next’

By Ian Fraser

Published: Sunday Herald

Date: March 18th, 2012

One of Scotland’s highest-profile investment experts, Alan Steel, has called on Financial Services Authority chairman Lord Turner to “consider his position” following Friday’s surprise resignation of the watchdog’s chief executive, Hector Sants.

Sants’s departure followed a Sunday Herald exclusive in which influential Conservative Treasury Select Committee member Michael Fallon MP expressed “deep reservations” about the former banker’s fitness to assume the lead role in the FSA’s successor body, the Prudential Regulatory Authority.

“The performance of the FSA under Sants has been shocking,” said Steel, chairman of investment advisory firm, Alan Steel Asset Management.

“His handling of the banking crisis has been all about protecting his own. As chairman, Turner should also consider his position.

“I don’t believe the head of a regulator should ever come from inside the industry again. When they do, it invariably ends badly for the public.”

Steel added that Sants’s departing annual pay package of £807,000 was “scandalous when you consider how little he has achieved”.

Sants joined the FSA from the investment bank Credit Suisse as managing director of wholesale in May 2004 and became FSA chief executive in July 2007. Much of the UK’s banking sector, including Royal Bank of Scotland and HBOS, crashed and burned on his watch, though he has been credited with spearheading some vital reforms since the crisis.

City analysts have noted that Sants’s departure precedes public airing of the FSA’s pre-crash actions and non-actions, expected to feature in a forthcoming criminal action against former HBOS executives and an expected £3 billion High Court case against Fred Goodwin and RBS.

Rowan Bosworth-Davies, a leading financial crime consultant and former Scotland Yard detective, said: “Sants is a professional private banker and has the mindset of such a person. He didn’t see or appreciate what was going wrong because culturally he is predisposed to ‘not seeing’.

“Sants is exactly what is wrong with the City and its style of regulation. The British have always believed that the Great and the Good, operating on the cult of the enthusiastic amateur, can police wrong-doing in the City, whereas it needs someone who is familiar with the ways of criminals.

“The FSA is staffed by a lot of people with fancy titles who like to meet and greet with other regulators around the globe, but none of whom have ever even investigated a shoplifter.

“How can they be expected to bring any real sense of criminogenic insights to the role when they themselves come out of the same class and background as those they supervise?”

Peter de Vink, managing director of investment firm Edinburgh Financial & General Holdings, said: “The FSA have not exactly covered themselves in glory. At least Hector Sants has had the decency to fall on his sword. The question now is whether the chairman, Lord Turner, will follow his lead.”

Sants, 56, will formally stand down in June and will not be replaced. Some of his duties will be taken on by Lord Turner, who became chairman in 2008. Andrew Bailey, a Bank of England executive director, will continue as deputy head of the FSA’s prudential business unit, and is a candidate to become chief executive of the PRA. The PRA will be a subsidiary of the Bank of England.

Martin Wheatley, a former Hong Kong regulator, is to continue as head of the FSA’s conduct business unit, and is due to become boss of sister body the Financial Conduct Authority when it is launched in 2013.

This article was the business splash on page 36 of the Sunday Herald on March 18th, 2012

Short URL: https://www.ianfraser.org/?p=6413

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3 Comments for “‘Now that the FSA chief executive has gone – its chairman should be next’”

  1. Its all very well for those responsible for the regulatory oversights of the banker driven economic crisis to fall on their swords but who is going champion relief for the individuals who are still being persecuted by these very same banking fraternities over debts that banking greed has created?

  2. […] the actors they are supposed to oversse. It’s coming out in the open in the case of the FSA (HS), but the same could be said of its French counterpart (Libé). Ending this state of affairs should […]

  3. Well said, Ian – an excellent article, as usual. The problem is, the FSA has only ever existed to fulfil a role of PROTECTORATE for HBOS and other banksters. It is peopled by ex-banksters, who look after their own. It has served as a buffer against banks getting their just desserts. The FSA has delayed, perverted the course of, and prevented justice for many thousands of victims of financial crimes. And Hector Sants has been groomed with a mindset that has been specially shaped “not to see” what is staring him in the face.

    When I contacted the FSA in 2007 on realising the unbelievable heist they had enabled against the creditors of the Vavasseur fraud, I recall John Tutt, the prosecutor for the FSA on the Dobb White Case, weakly saying “I know it must be galling for you…” but no action was taken. It went in one ear and out the other. Reams of writings of factual evidence provided, but no action from the FSA – they enjoyed changing the subject. This is complacency and/or complicity at its worst. It points to the insidious conspiracy role that the FSA has played against innocent people, for all these years.

    Words can not adequately describe the SFO’s and FSA’s abuse of their position. But what are the British establishment going to do about it? What will it take to get them to act appropriately? It is like moving mountains, the resistance is simply HUGE. The cronyism amidst these people is rife..

    The FSA could not have pulled off the heist without the SFO’s help. The evidence certainly suggests that both these “authorities” were in fact acting to help HBOS steal from their own clients and non-clients … Both the SFO and the FSA provably conspired to defraud the now-creditors of Vavasseur / Dobb White’s scam which was run by HBOS behind the scenes, and we know this because the SEC froze all of the moneys in the Vavasseur global infrastructure on 19 November 2001 – and the “authorities” failed to alert the creditors!

    Yet the Authorities have a DUTY to alert the fund-owners if their funds are frozen or in danger. This should go without saying. But instead the SEC hid all of their damning court records under court seal for the following seven years! And now, more recently, this vital evidence was removed from the public domain within the last few months, but I have a downloaded copy and a printed sealed copy of the Court order.

    The proof of the secret worldwide freezing order on Vavasseur’s infrastructure is in the SEC sealed court document (pasted below). This totally incriminates the FSA and the SFO and HBOS. Especially as HBOS were collecting all of the 68 toxic loans granted to retail clients on favourable terms especially for placing in their scheme in BUTTERFIELD BANK, Guernsey! Pooled funds, outside the jurisdiction of the UK. Against the FSA Principles and FSMA 2000 and the ‘Client Asset Security’ rules. And above all, are we to believe that this major Bank “did not know” that their client funds were frozen??? Of course they knew! They chose to go for more ‘risk’ by covering all their wrong-doing up!

    US receiver Roy Terry, was handed all of the creditors moneys by the FSA in December 2002. And the falsified record suggests that the SEC “froze” the moneys then. It was the FSA who handed the creditors money over to the American Government, without the fund-owners knowledge: these were moneys “held in trust”! Stephen Myers informed me of this, in late 2006, when I was preparing my witness statement for the SFO trail against Gangar & White, at Birmingham Court. Trouble is, I did not know the sordid truth at that stage. The SFO coached the witnesses at that trial, and threatened to remove them from giving evidence “if they even breathed the name HBOS”. It was certainly a cover up.

    So much so, that the SFO have not responded to an important letter, sent eight months ago, which refers to serious issues. They appear to have frozen on the spot. They have been rewarded for their failures by the taxpayer for too long now. It’s time they were held to account, like the rest of us. The likes of Fraser Mackay and James Crosby should be prosecuted and we need a full public inquiry into the Vavasseur toxic loans fraud.

    The ultimate ‘proof of the pudding’ regarding all of this ‘BLACK MONEY’ situation, is that Baker TIlly, the supposed Receivers for Dobb White in UK, have never produced a SCHEDULE of losses, nor received any of the forensic records from the US receiver Roy Terry – in over seven years since they were appointed. Nothing has been accounted for. No receivables or interest, declared. Roy Terry has never been audited. The lie has continued, undeterred, thanks to endemic corruption within the SFO and the FSA, both seemingly protectorates of HBOS / Lloyds Banking Group. It is now the people of Britain vs. these so called authorities and HBOS/Lloyds.

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