FSA Focus on Mortgage Fraud, Money Laundering, Enforcement Chief Cole Says

The Financial Services Authority plans to focus its stepped up enforcement efforts on stamping out mortgage fraud and money laundering in the year ahead, the agency’s enforcement director Margaret Cole said.

The regulator will visit mortgage lenders to review their financial controls and has started to study bank services “that pose high risks” for money laundering, she said in the FSA’s July Financial Crime newsletter. Last month the FSA said it doesn’t want the coalition government’s plan to dismantle the agency to disrupt a pipeline of criminal cases and record fines.

“There has been speculation over the FSA’s future role in relation to reducing financial crime risks,” Cole said. “We are determined to deliver a strong deterrent message. Whilst much has been achieved in the financial crime arena, there is still work to be done.”

The London-based watchdog has increased fines and won three of the four insider-trading cases it has brought to trial, after complaints it did little to stop the financial crisis. In the face of those changes, Chancellor of the Exchequer George Osborne said June 17 he plans abolish the FSA and give most of its power to the Bank of England.

The FSA’s enforcement unit, which prosecutes insider trading and market abuse, will be combined with the U.K. Serious Fraud Office and the Office of Fair Trading to create an economic-crime agency.

To contact the reporter on this story: Nandini Sukumar in London at nsukumar@bloomberg.net

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