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FSAboss Hector Sants threatens jail sentences for rule-breaking City firms

HECTOR SANTS, chief executive of the Financial Services Authority (FSA), yesterday threatened financial firms that flout the regulator&rsquo;s rules with a jail sentence, as he seeks to prove the watchdog&rsquo;s toughness.<br /><br />He said that if &ldquo;firms do not adjust their behaviours&hellip;people will go to jail&rdquo;.<br /><br />And Sants blamed the City&rsquo;s culture for the downturn, saying that &ldquo;some of the failures which have occurred have their roots in issues of culture and behaviour&rdquo;.<br /><br />Arguing there was &ldquo;an absence of collective responsibility&rdquo; for the global downturn, Sants also said that the FSA would now vet products offered by companies before they were marketed to customers. <br /><br />The news comes after the City regulator issued a record number of fines in 2008-9, as it stepped up its action against financial firms in the wake of the banking crisis. <br /><br />In 2008-9, the FSA imposed financial penalties worth &pound;27.3m. So far in this financial year, it has imposed fines of &pound;19.8m, which is greater than at the same point a year ago.<br /><br />Sants said the FSA had &ldquo;evolved&rdquo; into &ldquo;a radically different organisation,&rdquo; shifting from reactionary regulation to &ldquo;intensive supervision&rdquo;.<br /><br />Responding to Tory plans to axe the FSA, the body&rsquo;s chief executive said splitting up the regulator&rsquo;s responsibilities would be a &ldquo;return to the dark ages,&rdquo; and would &ldquo;invite a fragmentation of approaches and a turf war between the different bodies involved&rdquo;.