The Davis Enquiry into why the FCA leaked information about insurance industry investigations to the Telegraph has already cost close to £2.5m and expenses could rise, Derek Bradley has claimed.
The founder of online community PanaceaAdviser submitted a Freedom of Information Act request to the regulator, asking for information about costs, possible delays and expected dates of publication of the independent Clifford Chance report into the leaks.
In its response, seen by Financial Adviser, the FCA remained tight-lipped about the timings of the investigation, and whether there had been any findings made already.
It also told Mr Bradley that there had been no known delays caused by any red tape about the terms of reference set by the regulator.
The FOI response added: “You should note that no timetable has been set for the completion of this inquiry and there have been no delays caused by the issues you suggest or otherwise.”
The FCA had set aside £1.7m initial cost for the investigation, which was set in motion seven months ago, when the FCA’s independent directors appointed Clifford Chance litigator Simon Davis to conduct an inquiry.
It also revealed an additional £750,000 has been set aside for law firm Kingsley Napley to operate on behalf of FCA staff members involved in the enquiry.
The inquiry was set to investigate what appeared to be an announcement, made in The Telegraph by Clive Adamson, of an investigation into the insurance industry on the 27th and 28th March.
The comments, which had not been divulged to any other news organisation and came ahead of the official publication of the FCA’s Business Plan, sparked panic among investors and prompted a multi billion-pound sell-off on the FTSE 100.
Senior figures in the industry and parliament called for heads to roll.
When Mr Bradley asked the regulator of any other costs associated with this, the FCA’s FOI responded: “We have said that, based on an initial estimate, we have set aside £750,000 for [Law firm] Kingsley Napley’s work on the behalf of members of staff involved in the inquiry, and on the behalf of the FCA to assist with the inquiry.
“We have committed to publish the final cost when we publish the report.”
Mr Bradley said: “So, on top of a £1.7m initial cost set aside for Clifford Chance, a further £750,000 has been set aside for Kingsley Napley, who are to represent FCA staff.
“I am sure firms would not expect to see the FCA covering their legal costs in the event of an FCA investigation, so why should FCA staff have their legal costs covered in this way?
“Could it also be that if individuals at the regulator are seen to be at fault, investors would have grounds for taking legal action against the FCA over the incident? The ABI director general Otto Thoresen reckoned at the time it was “a definite question” but it would have to await the outcome of the internal review of the FCA.”