Ian King wrote this in the Sunday Times.
For an organisation seemingly hell-bent on transparency and disclosure, the Financial Services Authority was unusually tight-lipped yesterday following news that, after an investigation that began in April last year, it will take no disciplinary action against Guillaume Rambourg, the former Gartmore fund manager.
Yet a statement from the watchdog is surely merited. It is no exaggeration to say the FSA’s investigation has contributed to the near-destruction of Gartmore and cost its shareholders millions. When news broke that the FSA was investigating Mr Rambourg, on June 1 last year, shares of Gartmore fell by more than 5 per cent. By the time he quit six weeks later, to try to clear his name, they were close to their all-time low. Gartmore went on to suffer a big decline in assets under management and, in January, fell into the arms of its rival Henderson.
Eerily, news of Mr Rambourg’s exoneration comes as the FSA threatens to reduce another business to rubble....It seems to me that if good corporate governance is to be enforced by regulation and by regulators that those bodies need to behave responsibly and transparently. Of course they may make mistakes and they may be unable to find evidence to support suspicions. That is reasonable. But to take almost a year to investigate and then to give no public indication of what has happened is an outrageous abuse of process. Lives have been shattered, careers destroyed, savings annihalated. Was it necessary to announce the investigation in the first place? Might the wording of the announcement have been framed to limit the damage? Was it necessary to take nine months over the investigation? Could all these losses have been avoided?
If regulators can cause such damage without having to explain themselves to anyone do we risk adopting the worst aspects of Russian abuse of administrative systems?
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