Clive Zietman speaks to the Law Society Gazette in the recent article, ‘Financial Regulation: City Police’. The article examined how effective the financial services watchdog, The Financial Conduct Authority, has been since it came into force in 2013. Extracts from the article, in which Clive is quoted extensively, are set out below.
“April marks the fourth anniversary of a new financial regulation landscape in the UK. The Financial Conduct Authority blazed on to the scene in 2013 with a promise that there would be ‘nowhere to hide’ for financial services firms and individuals who misbehaved.
“As head of commercial litigation at complex disputes specialists Stewarts, Clive Zietman acted for RBS shareholders in relation to losses sustained in its April 2008 rights issue.
He told the Gazette:
‘If there was another financial crisis you would find a lot of the banks had [again] invested in products where they didn’t understand the underlying risk. You would be naive to think that it has all been cleaned up. I just don’t buy that.”‘
The article goes on to look at the access to justice issue of bringing this sort of claim. Clive comments:
‘The resources in terms of time and money needed to launch an action are considerable. It took three years to write the RBS case and about £1.5m – but that is what you need if you want to be taken seriously.’
Clive goes on to speak about the impact Brexit will have on financial services regulation:
‘There is a golden opportunity to look at all this stuff [with Brexit] and sort a lot of it out – once we can think for ourselves and not be bossed around. However, my experience of politicians makes me cynical and I am pessimistic that anything [positive] will happen.’
Clive would like to see the UK adopt a US-style system going forward:
‘In the US, directors are held to account – they have legislation going back to the Securities Act of 1933. In this country we have the very opposite, as a general rule. Under laws going back to the 19th century, shareholders can’t sue – with one or two exceptions, such as in the RBS case using the Financial Services and Markets Act on prospectuses. If things are going to change we need to have a piece of legislation similar to the US. But that is just not going to happen.’
Clive also commented on the resourcing issues of the Serious Fraud Office (SFO), whose gross budget has reduced to £45.7m for 2016/17 (from £62.3m in 2015/16).
‘The SFO is underfunded and it doesn’t have the right skill set, and that’s because the government doesn’t take fraud seriously enough. If it did, it would devote more resources. So it is the old story: nick a tin of beans from Sainsbury’s and you go to prison; go and commit a complicated financial fraud and get away with it.’
Please click here to view the full article by the Law Society Gazette.
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Media contact: Lydia Buckingham, Senior Marketing Executive, +44 (0) 20 7822 8134, lbuckingham@stewartslaw.com
