If I had a hammer . . .

U.S.-style plea-bargaining powers have long been on British financial regulators’ wish list. Now it looks as if their wish might come true.

The Wall Street Journal, citing a “person familiar with the matter,” reported that the U.K.’s treasury chief hopes to pass legislation this year allowing the Financial Services Authority to grant whistleblowers who report market manipulation immunity from prosecution.

The British move to strengthen its market regulator’s plea-bargaining powers has taken on added significance in light of the FSA’s current investigation into allegations that traders planted false rumors about banks in trouble, and then profited from the fallout. “The new powers proposed by the government are essential to our toolkit for tackling market abuse,” an FSA spokesperson said.

It’s not clear whether the FSA is proposing a “first-in-the-door-receives-flat-out-amnesty” program like the one offered by the DOJ’s Antitrust Division, or one in which whistleblowers will be considered on a case-by-case basis, with some being offered immunity and some being required to enter guilty pleas. The former would certainly be a hammer in the British regulators’ toolkit, but it also holds the possibility of allowing opportunists to wipe their slate clean and tell phony tales about others. Our heavy reliance on informant testimony should serve as a cautionary tale to our counterparts in the U.K. as they shop for new tools. CP