British markets watchdog names Mark Steward as new top enforcer
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By Huw Jones and Michelle Price
LONDON/HONG KONG, June 5 (Reuters) - Britain's markets watchdog has appointed the Hong Kong Securities and Futures Commission's Mark Steward as its top enforcer, it said on Friday.
Steward has clocked up several high profile victories as head of enforcement at the Hong Kong watchdog, including the first criminal prosecution for insider trading in 2009, and the first forced liquidation of a listed company for fraud in February.
On his move to Britain's Financial Conduct Authority (FCA), he will lead efforts to toughen enforcement. Since the 2007-09 financial crisis, British regulators have been shaking off a "light touch" reputation by pursuing "credible deterrence" with tougher actions.
The results have been mixed as scandals continued with banks fined for trying to rig benchmark interest rates.
On Friday the FCA levied a record 117 million pound fine on Lloyds bank as it seeks to draw a line under a string of mis-selling scandals stretching back more than two decades.
Lloyds was fined for failing to handle properly customer complaints about mis-sold loan insurance, the largest fine imposed by the FCA in the country's most expensive consumer scandal.
Steward, prior to joining the Hong Kong's Securities and Futures Commission (SFC), held a similar position at the Australian Securities and Investment Commission. His contract at the SFC expires in September.
HK REGULATOR UNDER FIRE
Britain's FCA also announced that Barbara Frohn will be its new director of risk and compliance oversight.
"These are two vital roles within the UK regulatory system and it says a lot about the FCA that we have been able to attract such high calibre candidates to fill them," FCA Chief Executive Martin Wheatley said in a statement.
The FCA's top enforcer post became vacant after Tracey McDermott moved into a supervisory role, broadening her experience at the watchdog. She is seen as a leading candidate to replace CEO Martin Wheatley when he moves on from overseeing Europe's biggest market at a time of huge regulatory change.
Steward, an Australian, will report to Wheatley, his previous boss at the SFC.
The Hong Kong regulator has come under fire in recent weeks amid fears the Hong Kong stock market is falling prey to manipulators following a series of strange price movements, including dramatic plunges in the shares of Chinese firms Hanergy Thin Film and Goldin Financial (Frankfurt: FIH2.F - news) .
Steward's aggressive style earned him a fearsome reputation during the early years of his tenure, particularly in 2009 when he strong-armed bank executives into repaying investors most of the money they'd put into structured products linked to Lehman Brothers.
But waning confidence in the SFC's capability more recently may cast a shadow over his legacy, said regulatory experts.
Market insiders said there were no obvious Hong Kong-based candidate to replace Steward, and that the regulator would likely have to look abroad, possibly again to Australia's ASIC, for a suitable successor. (Editing by Mark Potter and Susan Fenton)