NEWSMAKER – Chief enforcer takes tough line on UK market abuse

March 31, 2010

By Clara Ferreira-Marques and Huw Jones

LONDON, March 30 (Reuters) – A tough-talking, high-flying litigator, Margaret Cole joined Britain’s financial regulator five years ago as it began a crackdown on market abuse.

London’s biggest-ever swoop on an alleged insider dealing ring last week — a drama involving some of London’s best-known institutions and seven arrests — was evidence for many that this self-assured lawyer means business.

The UK’s Financial Services Authority (FSA), where Cole is director of enforcement and financial crime, has in the past been criticised for being too soft on market abuse, where cases are notoriously lengthy, complex and tough to nail.

But Cole has pushed financial crime to the top of the FSA’s agenda amid public outrage at having to foot an 850 billion pound ($1.3 trillion) bill for bailing out Britain’s banks in the wake of the credit crisis.

“Margaret is a formidable and pretty tough litigator who has gone to the FSA with some very clear objectives, particularly around market conduct and insider dealing,” said Martyn Hopper, partner at law firm Herbert Smith and a former head of markets enforcement at the regulator.

“The political mood music has changed beyond all recognition as a result of the financial crisis. There is now no real concern at the FSA about being seen to be too aggressive with the financial services industry.”

Cole, who arrived at the FSA in 2005 as it emerged from a painful review of procedures after troubles around a mis-selling charge against insurer Legal & General, has been able to call on what colleagues describe as a composed but tenacious character to capitalise on the changing mood.

Her department has ballooned from a staff of 200 in 2005 and a budget of 38 million pounds to a staff of 450 and a budget of closer to 66 million as the FSA grabs headlines by edging closer to an aggressive, U.S.-style handcuffs-and-jail policy.

But she has her work cut out. Figures from the FSA show unusual share price movements — a potential indicator of market abuse — in just over 29 percent of takeover announcements in 2008, little changed from previous years.


John Fordham, head of commercial litigation at law firm Stephenson Harwood and Cole’s boss on one of her first high profile cases — the recovery of pension funds plundered by media tycoon Robert Maxwell — calls her a “steely character”.

“She is an excellent litigator,” he says. “She’s bright and she knows her stuff. It’s a transition from being in private practice to doing what she’s doing,” he notes, but adds: “She has a lot more power and she seems to be using it to the full.”

Cole, brought up in a working-class family in northern England and educated at Cambridge University, joined the FSA from U.S. law firm White & Case after a period of soul-searching following the Asian tsunami of 2004, which struck when she was in Thailand.

She was already no stranger to high profile cases.

Her early career at Stephenson Harwood included work on the pension funds of Maxwell’s Mirror Group — which Cole describes as her “big break” — after the tycoon drowned in 1991. She fought off big name creditors, including Goldman Sachs, to secure a deal.

She also worked in recovery actions linked to the liquidation of Bank of Credit and Commerce International (BCCI), one of most complex cases in British legal history.

A steady stream of regulatory fines, arrests and a trickle of guilty verdicts have even helped stoke speculation that Cole could become a contender for the top job at the FSA after Chief Executive Hector Sants steps down this year.

“Margaret is an interesting mix. She is very tough as a director of enforcement. She brings more bite to the role and more of a lawyer’s approach than some of her predecessors, but she is very personable on a day to day level,” said Michael McKee, a partner at DLA Piper.

“If you did choose someone like Margaret (as CEO) it would be a signal you are taking a more SEC-type of approach,” he said, referring to the U.S. Securities and Exchange Commission.

A keen horse rider, Cole, 48, is married with no children. (Additional reporting by Kirstin Ridley; Editing by David Holmes) ($1=.6652 Pound) ((; +44 207 542 3214; Reuters Messaging: rm://

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