10th December 2014
The boss of the City watchdog is to lose his bonus of £115,000 this year, along with three other executives who also stand to miss out on payouts following a report criticising the leak of sensitive information to the media.
Martin Wheatley is one of four executives at the Financial Conduct Authority to lose out after a review into the leak of a story to the Daily Telegraph earlier this year.
The article said the FCA was gearing up for a probe into 30 million pension policies dating back to the 1970s and after the news broke, share prices at major insurance companies plunged, wiping billions off their value.
A critical report into the FCA’s strategy found that it was “high risk, poorly supervised and inadequately controlled”.
The report was conducted by law firm Clifford Chance at a cost of £3.8m.
The FCA announced that Wheatley, the FCA’s director of enforcement Clive Adamson,, communications director Zitah McMillan and markets director David Lawton would lose their 2013/14 bonuses.
Five other members of the FCA’s executive committee would see their bonuses reduced by 25%.
The regulator announced two days ago that Adamson and McMillan would leave the watchdog as part of a strategic review, although it insisted that the resignations were not the result of the damning report.
Andrew Tyrie, chairman of the Treasury select committee, said: “The Davis report tells the story of an FCA pursuing the wrong strategy in the wrong way. The catalogue of errors made across the organisation is shocking – and some of the errors went to the top.”
Tyrie said that the FCA Board originally intended to hold an internal inquiry, with some “external support”, which he found “plainly unacceptable”.
He added: “The FCA has fallen well below the standards it requires of the firms it regulates. Mr Davis has concluded that the body comprising the UK listing authority, in premeditated briefing, created a false market—causing considerable market uncertainty, worry for many consumers and some lasting damage.
“The Committee will, among many other things, examine whether these errors were a one-off or whether they reveal something amiss, perhaps seriously amiss, with the standards and culture of the FCA. We will also examine remedies, both those proposed or already announced, and others.”
John Griffith-Jones, FCA chairman, said: “The Board fully accepts Mr Davis’ criticisms and on behalf of the FCA we apologise for the mistakes that were made and the shortcomings in systems and controls which his report has revealed.
“Mr Davis also makes a number of recommendations about changes to our systems, processes and ways of working. We accept all of his recommendations and I can confirm that we are now implementing them.”
He added: “As a regulator we hold ourselves to the highest standards and in this case we fell short. I am determined the FCA will learn the lessons, and we will do our utmost to ensure that a situation like this will never happen again.”