11 JULY 1987, Page 22

Norty and Geoffrey

ANDREW Warburg, settling down this month to three years as a guest of Her Majesty, has much to answer for. It was his 'company, Norton Warburg — known as `Norty' Warburg to distinguish it from the unrelated S.G. — which offered to manage the compensation payments made by the Bank of England to Bank staff who lost their jobs when exchange control ended. Norty Warburg lost all their money for them, and the Bank (which had to replace it) was redly embarrassed. So the Norty failure prompted Professor `Jim' Gower's official inquiry into investor protection, and that in turn prompted the Financial Services Act and the Securities and Invest- ments Board and new rules and regulatory bodies extending to the Eurobond market and (soon) wholesale bullion, cracking down on the high street banks, moving further and further beyond the original modest need of protecting the casual saver against the casual incompetent, or worse. Now Ministers, still not satisfied, privately fume at Mr Justice Farquharson for not sending Geoffrey Collier, the insider trad- er, to jail. The judge, who has spent a working life in the criminal courts and is thus scarcely a pushover for a plausible wrongdoer, may have taken into account that the prisoner was disgraced and finished. In 1697 Parliament passed an Act to restrain the number and ill-practice of brokers and stockjobbers', who, the preamble said, were guilty of 'most unjust practices and designs, having unlawfully combined and confederated themselves together to raise or fall from time to time the value of stock.' The Act lapsed in 1704, because of apathy.