Financial Times: Sir Philip Watts and the Markets Tribunal: “Beware of what you boast. When the Financial Services Authority fined Royal Dutch Shell £17m last summer for market abuse, the regulator pointedly referred to the "speedy resolution" of the case…”: Tuesday 26 July 2005
By Martin Dickson
Published: July 26 2005
Beware of what you boast. When the Financial Services Authority fined Royal Dutch Shell £17m last summer for market abuse, the regulator pointedly referred to the "speedy resolution" of the case, which was held up as an example of its new and desirable emphasis on faster justice.
In fact, the outcome was not ultra quick. Shell first publicly revealed it had mis-stated its reserves the previous January, and by the time the FSA announced its fine, the company was already facing a substantially larger penalty from the Securities and Exchange Commission in the US.
Still, by the past standards of FSA investigations, this was relatively fast. But now its speediness has come back to haunt it, with yesterday's appearance of Sir Philip Watts, Shell's former chairman, before the Financial Services and Markets Tribunal.
Sir Philip, who has also been under FSA investigation, claims the regulator treated him prejudicially. First, it failed to give him a copy of its decision notice criticising Shell, and the right to respond. Second, it published the notice. For although it did not name Sir Philip, he was clearly identified with running the company. The FSA, he argues, could have delayed its notice until its individual investigations had been completed, or kept its findings at a higher level of generality.
The FSA replies that the fact Sir Philip was not singled out, and that all its criticisms were at the level of corporate personality, means he cannot have been prejudiced.
The case highlights the tension between the FSA's desire for speedy results, and the rights and differing interests of companies and the individuals employed by them. If the FSA loses, it could mean enforcement cases are more tortuous and take substantially longer. The regulator is fond of saying that "justice delayed is justice denied". But, as Sir Philip would doubtless agree, that may not always be the case.
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