The Times: Senior enforcer quits FSA for ex-Shell chief's legal adviser: “THE senior Financial Services Authority official who supervised the case against Sir Philip Watts is quitting to join the former Shell chairman’s lawyers.”: “…Sir Philip remains under investigation by the FSA over his role in the exaggerated oil reserves scandal at Shell.”: Friday 21 October 2005
By Patrick Hosking, Investment Editor
THE senior Financial Services Authority official who supervised the case against Sir Philip Watts is quitting to join the former Shell chairman’s lawyers.
David Mayhew is leaving the regulator at the end of November and immediately joining Herbert Smith, whose client Sir Philip remains under investigation by the FSA over his role in the exaggerated oil reserves scandal at Shell.
Unusually for such a sensitive gamekeeper-turned-poacher move, there will be no “purdah” period between the two jobs, raising eyebrows in the City and Parliament yesterday. Mr Mayhew will work in the same team as Martyn Hopper, who is advising Sir Philip and who was himself a former FSA enforcer. He will work on cases involving the FSA and other regulatory work.
Mr Mayhew, who is currently the FSA’s leading advocate, was acting head of the enforcement division — the regulator’s powerful investigating and prosecuting arm — from January until July 18 this year. Throughout that six-month spell, the division was engaged in fighting Sir Philip in the Financial Services and Markets Tribunal, and Mr Mayhew was closely involved. The FSA won that battle last month.
Both the FSA and Herbert Smith insisted that Mr Mayhew was not compromised in his new role. They declined to say when Herbert Smith first approached Mr Mayhew about the job.
Sonya Leydecker, Herbert Smith’s head of litigation, said: “David Mayhew will have no involvement in the Philip Watts matter and has not and will not discuss that or any other matter he worked on at the FSA with anyone at Herbert Smith. As a solicitor, he remains under strict obligations of confidentiality as a result of his employment at the FSA. Both we and he fully understand those obligations.”
The FSA said that the need for purdah was decided on a case-by- case basis. It was not thought necessary for Mr Mayhew, who will continue to work on existing cases until he leaves.
David Ruffley, a Conservative member of the Treasury Select Committee, said: “To maintain confidence, it would be best if purdah periods were observed. I wonder if that shouldn’t have been considered in this case.” One City regulation lawyer, who declined to be named, said: “Herbert Smith will have to be pretty careful. This is the second hire from the FSA to raise eyebrows.”
It is not the first time FSA enforcement chiefs have joined firms they previously investigated. Carol Sergeant joined Lloyds TSB and Andrew Proctor went to Deutsche Bank. Both observed periods of purdah.
Mr Mayhew, 51, a former partner with Clifford Chance who joined the FSA in 2001, is estimated to be going to Herbert Smith on a package of at least £350,000.
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