FSA is losing war on insider dealing - Telegraph.
Some 60pc of the members of the Chartered Institute for Securities & Investment Institute responding to a survey on whether the Financial Service Authority was winning the war on market abuse said the regulator's actions had failed to make serious inroads against financial wrongdoing.
"The FSA still has a long way to go and should seek Government approval for bigger penalties and a zero tolerance," wrote one of the 235 respondents to the CISI's internet survey, which polled the organisation's membership of stockbrokers, analysts, fund mangers and investment bankers.
And I'm quite sure large quantities of this will be done through offshore companies owned by offshore trusts, all managed by offshore professionals, all of whom turn a blind eye - or more likely, have no clue what their client is doing.
And yet those same offshore professionals who turn up on this site say there is no need for any public disclosure by offshore investment companies.
And say there will never be a need for a register of trusts with accounts available for public scrutiny.
Tehy're wrong. Those structures are designed to assist fraud.
And that's what they're used for.
NB Fraud need not be a crime. Fraud is an intentional deception made for personal gain or to damage another individual. The secrecy offshore provides is key to that deception. It is fraudulent by definition.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
There are links to this blog's glossary in the above post that explain technical terms used in it. Follow them for more explanations.
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Buy me a coffee!
Yet again, a huge assumption backed by nothing. I appreciate that you think you’re a busy man, but perhaps you could provide evidence that offshore companies were used?
I don’t argue that there is a huge amount of insider trading taking place in the City, but that has nothing to do with offshore secrecy.
@Greg
Not a huge assumption, just reasoned thinking backed by massive evidence over time that corruption tends to take place through offshore companies
Of course evidence is limited
Your corruption works
That’s why people buy it
But for your case to be valid I have to believe that insider dealers a) trade in their own name or b) do so through UK companies which have to file records with tax authorities and other regulators, unlike offshore entities and c) those in the City are unaware of the abuse you facilitate
None of those are plausible
And you know it
(a) Why would anyone trade in their own name? Recent cases (and evidence from several books) point to collaboration with other parties who place the trades in their name. To make insder trading work, the insider needs to completely distance themselves from the trade. Using an offshore entity wouldn’t achieve this.
(b) Offshore entities provide full evidence of all trading activity if requested by a regulator, which is exactly the same as onshore.
(c) It is irrelevant, as shown by the 2 previous points.
@Greg
a) Don’t be silly. Of course regulators have no clue who owns offshore companies. They can ask, but someone has to give them reason to do so – and under the absurd TIEA rules – no one will. So don’t talk nonsense. Effectively
b) Nonsense. The applicant ignores the request. Don’t be silly. and given they’re offshore to the regulator there’s nothing that can be done about it
You really do think we’re stupid don’t you?
Of course you have to have reason to do so, but that’s the same in the UK. My trading records with my UK broker are not a matter for public scrutiny, and it’s the same with my CI broker.
And as someone who’s atually worked in the offshore industry, I can tell you that if a regulator or law enforcement agency asks to see account details because they believe a crime has taken place then they get access.
In general, if suspicious activity takes place prior to a market announcement, internal compliance procedures would first pick up the activity.
We may be well versed in the (legal) art of tax avoidance, yet we do not allow criminal activities to take place.
The issues with insider trading result from having an inept regulator, and having nothing to do with offshore finance centres.
@Greg
Respectfully, your comments are crass
I do not believe you can be stupid enough to think a fraudster leaves the audit trail you would have us believe exists
That is complete nonsense
And you know it
Richard
Richard, spend some time looking into the recent cases. And then ask the FSA why they’ve not been more successful at catcing anyone.
@Greg
They can’t proceed in most cases because you hide the evidence
That’s what fraud prosecutors ( and I know quite a number) tell me
I rest my case
Richard, there is a considerable amount of insider dealing going on on Wall Street, including in the London subsidiaries. it is completely unacceptable, and you are correct in highlighting the problem.
The immense majority of it is committed onshore, but the SEC (like equivalents in smaller marginal places like the British FSA) are under-resourced to deal with it.
The offshore-onshore issue is irrelevant in this case, but good effort anyway.
Keep the good job buddy!