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U.K. Regulator Shaves Criminal Case Length as Experience Grows

by Suzi Ring
July 3, 2015 — 6:15 AM EDT
http://www.bloomberg.com/news/articles/2015-07-03/u-k-regulator-shaves-criminal-case-length-as-experience-grows

The U.K. Financial Conduct Authority resolves criminal cases nearly 25 percent faster than it did four years ago, as the regulator’s prosecution experience has grown.

The FCA took an average 31.7 months on criminal cases resolved in the year through March compared with 41.6 months in 2011-12, according to its annual report and a freedom-of-information request from Bloomberg. Case length has been shortening gradually over the past four years with an average 41.4 months taken in 2012-13 and 34 months in 2013-14.

The FCA has pursued more criminal cases since the 2008 financial crisis, after politicians and the public called for more bankers to face jail time for wrongdoing. Insider trading is one of the key areas the regulator has clamped down on with 27 convictions since 2009. Before that it had never successfully prosecuted anyone for the offense.

As a regulator the FCA’s criminal powers are limited. They include prosecuting insider trading, money laundering, unauthorized regulatory activity and illegal share schemes. Major fraud cases are referred to agencies like the Serious Fraud Office.

“It’s a case of the more you do the better you get. Ten years ago the FCA had very little experience with prosecutions but they’ve hired aggressively from the criminal bar and other agencies,” said Sarah Wallace, a London-based lawyer at Irwin Mitchell LLP. “Criminal sanctions are an important tool for deterrence and the FCA seems to have realized that.”
Backlog

Criminal cases are harder to bring because of the higher burden of proof and, with a person’s liberty on the line, individuals nearly always fight. The backlog of cases in U.K. courts also means they’re often slow to progress, with trials set many years in advance.

By comparison, the average time taken by the FCA to complete civil cases was 18.5 months last year, down from 24.2 months in 2012-2013. A large proportion of civil cases are against firms that generally try to settle quickly to avoid reputational fallout.

A spokeswoman for the FCA declined to comment.

The FCA secured a 19-month jail sentence for ex-Moore Capital Management LLC trader Julian Rifat for insider trading in March, one of the its most high-profile criminal cases to date. Paul Coyle, the former group treasurer and head of tax at William Morrison Supermarkets Plc, received a 12-month prison sentence for a similar offense the same month.

http://www.bloomberg.com/news/articles/2015-07-03/u-k-regulator-shaves-criminal-case-length-as-experience-grows