Legal Business Blogs

FCA turns to Clifford Chance’s Davis over handling of proposed insurance industry review

The Financial Conduct Authority (FCA) has appointed Clifford Chance‘s senior commercial litigation partner Simon Davis to conduct an independent inquiry into the handling of the body’s botched announcement of an investigation into the insurance industry.

The FCA has commissioned an independent inquiry into events leading up to and following the publication of its intention to review certain long-term life assurance products on the 27 and 28 March – a plan that was revealed to The Daily Telegraph, causing millions of pounds to be wiped off share values.

The review was included in the FCA’s business plan, which was published on 31 March 2014.

The FCA stated the aim is to publish the final report ‘as quickly as is reasonably possible, bearing in mind the time needed by Davis to complete his investigation and allow any individuals subject to potential criticism an opportunity to make representations in response to the inquiry’s proposed findings’.

Davis will be required to consider whether there was an ‘appreciation that the business plan could contain information that was price-sensitive;’ and ‘why and with whose knowledge and authorisation was this briefing given, particularly to a single journalist.’

Chancellor George Osborne said in an open letter to the FCA chairman John Griffith-Jones last week he was ‘profoundly concerned’ by the pre-briefing of information concerning the FCA review, which appeared to cause ‘considerable disruption in the trading of insurance shares.’

The letter added: ‘These events go to the heart of the FCA’s responsibility for the integrity and good order of UK financial markets, and have been damaging both the FCA as an institution and to the UK’s reputation for regulatory stability and competence. I expect you and the FCA board to do everything possible to make good that damage.’

Having joined CC in 1982, Davis has nearly 30 years of experience in corporate and financial institution investigations while the firm’s regulatory investigations, enforcement and white collar team was established ten years ago.

Heavyweight investigations are big business for the City’s prominent litigation teams, as exemplified by the recent disclosure by the Royal Bank of Scotland in November that it had appointed Clifford Chance to conduct an independent inquiry into the treatment received by small business customers in financial distress, after allegations that the bank deliberately drove them to collapse for its own gain.