Plans to give the Financial Services Authority (FSA) new powers to curb market abuse will have little impact until the authority takes a braver stance on prosecuting cases, solicitors said this week.


The Treasury has proposed giving the FSA powers to grant whistleblowers who provide information about market abuse with immunity from prosecution, and offer plea bargains to those involved in market abuse.



However, City lawyers said insider traders currently have so little fear of being caught that there is no incentive for them to come forward and offer information.



Clifford Chance partner Roger Best said: 'People have got to feel sufficiently threatened to seek immunity. Today's record of prosecutions does not strike fear into those working in the markets... The FSA needs a few convictions under its belt.'



Freshfields Bruckhaus Deringer partner Simon Orton believes the FSA has been given all the powers it needs. He said: 'The FSA needs to start taking bold decisions to bring prosecutions in cases that it may lose.'



An FSA spokeswoman said the proposals would be a 'useful tool'.



Rachel Rothwell