In a TV Close Up investigation of the recent conviction of Directors of failed finance company Lombard Finance Ltd, the Chief Executive of the Financial Markets Authority stated that the law had to be applied without fear or favour to everybody. Quite. This is, as I understand it, the lay persons’ understanding of how the legal system works.
Consequently, being a knight of the realm, as one of the directors is, makes absolutely no difference to ones treatment before the law. Again. Quite right it would seem. How else could we observe fair treatment before the law?
Asked, however, why these particular directors had been chosen amongst many who might have been charged, the Chief Executive stated that the FMA had criteria it used in picking whom to prosecute. These criteria include (inter alia presumably):
- the amount and quality of evidence the Authority has to prove the case and get a successful prosecution; and,
- the ability of those they prosecute to pay any fine which might be imposed by the Court.
This has to be worrying logic – presumably if the evidence is a bit shakey and one is fairly broke one needn't worry too much about the law?
Thankfully only in the fantasy world of securities regulation do we find this type of tortured thinking which is as hopelessly flawed as the idea that regulation can save investors from the world and themselves.