By Mark Kleinman, City Editor
Fund managers have begun questioning the future of the executive in charge of London's market disclosure regime following the insurance sector debacle which wiped billions of pounds off share prices last week.
Senior City sources at asset management groups and insurance companies affected by the botched briefing announcement said they had lost confidence in Marc Teasdale, who has headed the UK Listing Authority (UKLA) for the last nine years.
The UKLA, which is part of the Financial Conduct Authority's (FCA's) markets division, is responsible for maintaining confidence in securities markets by prompting full and timely information disclosures by companies.
Last Friday, the FCA triggered the biggest crisis in its year-long history when it briefed a national newspaper about a probe it was planning to launch into certain aspects of the closed-life insurance industry.
The City regulator then failed to issue a statement to clarify the newspaper story until almost six hours after the London stock market had opened, during which time the share prices of companies such as Aviva, Legal & General and Resolution were hit hard by investors' interpretation of the potential impact on their businesses.
One leading fund manager said on Friday that Mr Teasdale had made a "catastrophic mistake" by not forcing the FCA to clarify its position at 7am, before the market opened but several hours after The Daily Telegraph's story had been published.
"The UKLA is a busted flush if the same management remains in place," a board member of one major UK insurer said.
"How can their raison d'etre to force proper disclosure by issuers [companies] have any credibility unless heads roll over this?"
The partial recovery in insurers' share prices last Friday came after the FCA corrected some details of the newspaper report, by which time hedge funds, other investors and individuals had made significant sums from trading in what was effectively a false market.
Sky News revealed earlier this week that Clive Cowdery, the founder of Resolution, had made a paper profit of approximately £200,000 by acquiring 1.2 million shares in the company close to their low.
Last Friday evening, the watchdog issued a further statement to say that its board would be appointing a law firm to conduct an inquiry into the fiasco.
A Treasury source said that the FCA had selected a law firm to carry out the review although it was unclear whether it had been approved externally.
Andrew Tyrie, the Conservative MP who chairs the Treasury Select Committee, has called the FCA's actions "an extraordinary blunder", while George Osborne, the Chancellor, has labelled them an "egregious error".
Some insurers suggested last weekend that Martin Wheatley, the FCA chief executive, might have to resign over the fiasco, although Mr Osborne is unlikely to be keen on such an outcome given the tentative state of much of the regulatory work that he is overseeing.
The FCA declined to comment.
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