The scrapping of the Financial Services Authority must not disrupt a pipeline of pending insider dealing and market abuse cases, its enforcement chief warned this week.

Margaret Cole (pictured), the FSA’s director of enforcement, said it is ‘vital that the momentum of enforcement activity is kept up during the transition to the Consumer Protection and Markets Authority’.

Chancellor George Osborne said last week that the government will scrap the FSA by 2012 and hand the majority of its powers to the Bank of England. A Consumer Protection and Markets Authority and an Economic Crime Agency will be set up to regulate financial services companies and prosecute serious economic crime. A Financial Policy Committee will monitor economic and financial stability.

Cole told the FSA enforcement conference on Tuesday that it is ‘essential’ that the new authority maintains a strong and respected enforcement function.

‘Our pipeline of insider dealing and market abuse cases is flowing very freely,’ she said. ‘We have another criminal case due for trial in November this year, and three more already fixed for trial next year. There are numerous other cases under investigation. This strong pipeline has taken several years to build. It’s important if we are to continue to get results that this pipeline isn’t disrupted, especially because these complex matters have a long investigative period before charging and a lengthy court process before trial.’

FSA chief executive Hector Sants said: ‘Whatever the future structure, it’s important that regulators continue to deliver credible deterrence. Regulators must continue to pursue complex cases involving City professionals.’

Cole said that since the FSA began a ‘long-term’ programme to combat insider dealing in early 2007, it has secured five jail sentences. The FSA is currently prosecuting 18 people for alleged insider ­dealing in four separate cases; 14 more have been arrested and had their premises searched; and a further four people have been charged with making misleading statements.

Sarah Wallace, a partner in the regulatory and criminal investigations group at national firm Irwin Mitchell, said: ‘A unified financial crime agency is to be welcomed if it reduces overheads, speeds up criminal investigations and eliminates inconsistency that can arise from the multi-agency approach, for example when different crime agencies investigate and prosecute the same case.

‘However, I hope that specialist work, such as the FSA’s insider dealing crackdown, or the Serious Fraud Office’s corruption clean-up, are not sacrificed or diluted in the merger process.’