rogue traders but to some this may seem to stretch credulity. Banks engage in multiple levels of employee monitoring. They can create firewalls between different departments. They are able to establish robust chains of compliance and highly detailed audit trails. It is reasonable to question how it was possible for widespread abuses to flourish and remain undetected for years.
Since the far-reaching deregulation of the financial markets, an event, which was described in the mid-80s as the ‘Big Bang,’ we have heard a discordant cacophony of little bangs and big bangs. Finance has seduced the finest minds of the last three decades with the promise of great riches. It is a sector that attracts innovators who keep on churning out ever more complex financial instruments. The challenge for the regulators is an increasingly daunting one. They are mired in the past; they are condemned to play a reactive game. How can they compete against the monolithic might of these supposed ‘masters of the universe’.
The regulators move slowly and arguably have one hand tied behind their backs, clearly such matters are buried to avoid detection. Investigating the activities of the banks is a painstaking process. It can take months and years. The civil actions that small and medium size enterprises institute may provide a keenly anticipated picture of the culpability of the banks but one can not help and suspect that the banks will do their level best to stop such cases in their tracks.
Mis-selling has been, and continues to be, colossal news in the press. Regulators and the victims may have an uphill struggle but more is becoming known about the banking practices through articles, publications, findings and from whistleblowers.
Mark Carney, the Governor of the Bank of England, has recently pointed out that financial penalties alone are insufficient to deter the banks, “Fundamental change is needed to institutional culture, to compensation arrangements and to markets”; penalise the people directly responsible, dock pay and ensure they forfeit their bonuses. Perhaps that falls short of what is required. Until governments find the political will to introduce legal regimes that will criminalise banking excesses, no amount of fines or lost pay are likely to dent the colossal riches that these companies and their employees enjoy.
People think mis-selling is exclusive in the UK. This is not true. There may have been an array of financial products mis-sold to or through Jersey institutions and individuals and there may be recourse in Jersey. The Jersey Courts may not yet have had a serious case of mis-selling to deal with but that does not prohibit a test case being brought. Although Jersey does differ from the UK it may largely follow what can be learned from the UK. At Sinels we are currently dealing with a number of mis- selling cases against financial providers both in Jersey and overseas. We have seen an increase in victims looking for advice, particularly in respect of potential actions in Jersey. We have also recently undertaken several information and fact- finding exercises with the local regulator and experts from the UK who are dealing with similar cases on an almost daily basis. Jersey will most probably start to see a rise in mis-selling cases and we would urge those who may believe they are a victim to seek advice as soon as possible.
Exceptional Jersey law
advice.Always.
Corporate & Commercial Debt Recovery
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Fraud & Asset Tracing Financial Mis-selling Negligence
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T: 01534 620500
www.sinels.com
20/20 Finance & Investment Page 77
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