THE LONDON TIMES: Wrong target: “It’s not the first time the FSA has punished the victims of market abuse. The £17 million fine slapped on Shell for misleading the market over oil reserves just added to the pain of the shareholders, the very people hurt by the scandal.”: “The FSA believes that in such cases it is up to shareholders, seeing the fines, to call the directors to account and make sure they share the pain through their pay packets. It seems an awfully elaborate way of punishing the wrongdoers. There is nothing to stop the FSA targeting directors directly. It has the necessary powers and should use them.” (ShellNews.net) 28 Jan 05

January 28, 2005

Business Editor's Commentary

By Patience Wheatcroft  

THE £450,000 fine meted out to Pace Micro Technology yesterday was directed at the wrong people. Pace had been found guilty of misleading shareholders by keeping quiet for two months about a plainly price-sensitive setback. When it finally came clean, the shares nosedived. Anyone buying its shares in that two-month period has every right to feel hoodwinked.

Yet by fining the company, not the directors, the FSA is ensuring that it is those same misinformed shareholders who will ultimately pick up the tab.

It’s not the first time the FSA has punished the victims of market abuse. The £17 million fine slapped on Shell for misleading the market over oil reserves just added to the pain of the shareholders, the very people hurt by the scandal.

The FSA believes that in such cases it is up to shareholders, seeing the fines, to call the directors to account and make sure they share the pain through their pay packets. It seems an awfully elaborate way of punishing the wrongdoers. There is nothing to stop the FSA targeting directors directly. It has the necessary powers and should use them.