G. Fooks
Mar 2, 2010
Citations
0
Influential Citations
9
Citations
Journal
LSN: Corporate Law (Topic)
Abstract
Criminal investigation into "mis-sold" financial products in the UK is rare. Prosecution is rarer still. This is despite the fact that mis-selling - whether it be pensions, endowment mortgages or payment protection insurance - is a widespread and recurring phenomenon. The absence of criminal prosecution asks us to believe is that although the financial service industry may be riddled with incompetence, poor training and inadequate systems of quality control, it is, nonetheless, honest or at the very least, free from crime. This paper explores some of the problems involved in objectively testing this interpretation. It demonstrates the methodological and practical barriers to research that attempts to establish whether or not consumers may have been the victims of widespread criminal selling practices. It will also demonstrate that these barriers are located in and arise out of the specific regulatory environment within which the financial services industry is situated. To this end, it examines the interdependence and interaction between three basic processes: the control that companies exercise over information about their operation, the system of financial regulation and the production of public knowledge concerning the legal status of potentially mis-sold financial products. The organising principle of the discussion is the idea that corporations have a decisive, if mediated, influence on the form, content and extent of publicly held and available information about their business. One consequence of this influence is that companies are granted an extraordinary power of definition over how the nature, purpose and impact of their operation can and should be understood. The basic conclusion is that both past and present regimes of financial regulation, first under the auspices of the Securities and Investment Board (SIB) and now under the direct control of the Financial Service Authority (FSA), do little to mitigate this. On the contrary, the system of financial regulation in the UK (and, therefore, commercial fraud control) allows itself to be excluded from selecting, assimilating and ultimately generating information which can form the basis of a criminal investigation, leaving the question of criminal liability unexplored.