🚀 go-pugleaf

In article <1992Oct29.171911.4872@infodev.cam.ac.uk>, I wrote:

|> In the UK, the Securities and Investment Board (which is a private company) 
|> has greater powers of investigation than the police; for example, it can 
|> compel testimony without a warrant.
|> 
|> If they want to, they can force you to hand over crypto keys just
like that. 
|> They can also delegate powers to recognised professional bodies such as the 
|> Law Society, and to recognised clearing houses.

weaver@kuttner.sfc.sony.com (Eric Weaver) was amazed:

> By what act or law can they do that?  Doesn't it conflict with the
> Magna Carta or Brit. Bill of Rights?  Inquiring Yanks wanna know.


The current legislation is the 1986 Financial Services Act.

The UK is not alone in this, as many countries have non-police agencies
which enforce money and investment market regulations. The third world is 
particularly bad, as governments there often use exchange controls to loot 
their citizens, enrich themselves and their cronies, and (in the process) 
wreck their countries' economies.

In fact, you can be deprived of your liberty in Britain if an overseas 
agency suspects you of doing something that's not even a crime here.

For example, my wife has an Indian name. If the Directorate of Revenue 
Intelligence in India noticed this and wondered why we weren't registered
with them for exchange control, they might suspect me of exchange control
violations and ask the SIB for assistance.

Never mind the fact that Britain has no exchange controls, so even if I 
had bought a few rupees at Thomas Cook's in London, it's not a crime here.
Forget that neither I nor my wife have ever been to India, and so we cannot 
possibly have come under Indian jurisdiction. This sort of detail didn't 
seem to interest the great and wise civil servants who framed our laws.

So the SIB monitor my traffic and see that it's encrypted. Can't have that! 
I get told to hand over my PGP private key and put in jail until I agree.

The supposed justification for giving these powers to the SIB (and for giving 
similar powers under the Companies Act to the Department of Trade and
Industry) is that conventional law enforcement had a very poor record
against suspected securities fraudsters. Just the same sort of reasonable
sounding practical argument which Denning used and which every bureaucracy
will use when it can to increase its power.

But two things seem wrong:

[1] if the SIB's real purpose was to solve financial crimes, it wouldn't 
be set up and staffed the way it is. Their head of enforcement's previous
career was as an accountant with London Transport, and his lawyer used to
work in the rent rebate office of Hackney council. Their 13 investigators
are paid 21,000 pounds a year, which doesn't buy you a very clever lawyer
in London (a detective constable in the police gets 24,000; a corporate 
law partner maybe ten times that).

[2] The Department of Trade and Industry acts as the arms and legs of our
very own spook agency, GCHQ, when it comes to controlling the export of
cryptographic equipment and working on security standards such as ITSEC.

So what's the SIB actually for? I think we should be told,

Ross